![]() ![]() So, for example, if you invoice your customers $30k a year, Hnry will cost you $300 if you invoice your customers $150k or more a year, Hnry will cost you $1.5k.An independent contractor agreement is between a contractor that performs a service for a client in exchange for payment. The cost of Hnry is 1% or $1 per $100 of your self-employed income earned, to a maximum of $1500 + GST per annum. #CONTRACTOR EXPENSES APP FULL#This is a little more cumbersome than a full accounting program such as Xero, however, as most contractors have few expenses, this is generally not too problematic. #CONTRACTOR EXPENSES APP CODE#You claim business expenses by uploading a photo of your receipts or a copy of your supplier invoices/bills and then completing a quick questionnaire that enables Hnry to code the expense correctly. Copies of your receipts are kept for seven years. ![]() You can generate reports from Hnry that detail your earnings, and banks and other institutions are generally happy to use them as proof of income when applying for loans and mortgages. This makes being paid as a contractor very similar to the experience of an employee. When Hnry deposits the balance of your customer’s payment into your regular bank account (after paying the taxes due) you will receive a payslip. ![]() This is great from an administration perspective but from a cash flow perspective, it does mean that you pay your IRD obligations early (and therefore you lose access to these funds earlier than necessary). When a customer pays your invoice into your Hnry Bank Account, Hnry automatically calculates, deducts and pays your taxes before immediately passing back the money leftover to your regular business bank account. You invoice your customers directly from the Hnry app, and payments are received into a unique Hnry Bank Account which Hnry sets up on your behalf. You do not need a dedicated bookkeeper or accountant. There is a team of accountants in the background supporting the Hnry application and users. When you use Hnry, you do your own bookkeeping (invoicing, entering invoices and expenses, etc). The major advantage is that, unlike Xero and traditional accounting programs, Hnry calculates tax payments and deductions and makes the payments to the IRD on your behalf (Income tax, GST and ACC). Hnry makes tax calculations, returns and payments on your behalf. It is a cloud-based accounting solution that offers only the accounting features required by contractors and sole traders.īecause Hnry is designed specifically for sole traders – it is not suitable for businesses that are structured as companies. Hnry is designed specifically for self-employed contractors. (It goes without saying not to choose your accountant on price alone – be sure to talk to them and make sure they will provide the support you need). Most accountants offer packages that include a Xero account. Xero plans start at $27.50+GST a month ($330 a year), and the price you pay for your accountant or bookkeeper depends on how much support you need. #CONTRACTOR EXPENSES APP SOFTWARE#Xero has a payroll module, and an app marketplace with many programs that integrate into Xero designed for certain industries and circumstances, including inventory management software such as Vend. Again, you will need to manually pay your GST to the IRD when it is due. Either you or your accountant will use Xero to submit and calculate your GST, depending on the level of support you have agreed with your accountant. If you are registered for GST, this is calculated via Xero based on your business transactions. You will need to set aside money to pay this tax, but your accountant should help you to plan and understand how much this will be. Using the information entered into Xero, your accountant will calculate and submit your income tax returns. What happens with my tax calculations, returns and payments? A good accountant will also give business and general advice, which can be invaluable. In addition to the Xero program, most people will need an external accountant to review their transactions, provide support, and calculate their tax returns. Xero makes the bookkeeping process easy with its intuitive interface, and by ‘Linking’ the business bank account. Bookkeeping is the process of recording every transaction the business undertakes, including recording the day-to-day invoicing, cash collection, expenses and bank reconciliations. Small businesses that use Xero tend to do their own bookkeeping or get an external or contract bookkeeper. However, it is this reason why it is sometimes seen as more complicated than necessary for small sole-trader businesses such as contractors. It is intuitive and easy to use, it is well known and accepted, and it has full accounting features and reporting.Īs Xero is a full accounting program, it can be used for sole traders, companies or other business structures such as trusts. Xero is a cloud-based accounting program. ![]()
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