Hnry Review
We review Hnry, the service that files all taxes for contractors, freelancers, sole traders and company directors. In our review, we look at the features, costs, pros and cons and alternatives to Hnry regarding tax services for the self-employed.
Updated 1 July 2021
Hnry in a Nutshell:
Who uses Hnry?
The process of payment to bank deposit is simple:
To explain what you need to know about Hnry, our guide outlines:
Important - This guide does not offer tax advice, nor does it attempt to give guidance about anything specific to your personal tax situation. Instead, we review the pros, cons, features, costs and alternatives of the Hnry app.
- Hnry is an online accountant and invoicing app that pays tax, ACC and all other gross deductions on your behalf. The app also organises your income into reports, lets you send invoices and quotes, and lodge/claim back expenses against your income.
- Unlike many accountants who charge on an hourly or report basis, Hnry is a pay-as-you-go service with a variable fee based on how much you earn in self-employed income. You'll pay 1% + GST on every $100 you earn, up to $1,500+GST per year. Those who earn more than $150,000 in a year will not get charged more than $1,500 in Hnry fees.
- Hnry is interactive and customer-focused - support is offered via online chat, email and phone.
- Hnry users can utilise the app to send invoices to clients, log expenses, access payslips and send quotes to current and potential clients. Everything is done online, thus avoiding the need for Excel, Word and any other offline tools.
Who uses Hnry?
- Hnry is designed exclusively for independent contractors, freelancers, and sole traders who want an easy-to-use and low-cost accounting service that eliminates the risk of underpaying taxes and other obligations. Hnry is the only service (that we know of) that automatically pays taxes for sole traders.
The process of payment to bank deposit is simple:
- When you sign up to Hnry, you get given your very own Hnry Bank Account (operated by ASB).
- Clients pay into your Hnry bank account.
- Whenever you get paid, Hnry deducts the correct amount of income tax, GST, ACC levies, KiwiSaver contributions and any other deductions such as student loans, child support and other obligations.
- Once all deductions are finalised, Hnry pays whatever is left into your personal bank account. It sends you an email to tell you you've been paid.
- On a normal weekday, the standard process from Hnry detecting you've been paid to being paid net of deductions takes around four to six hours during business hours. For example, if a client pays you at 10am and it appears in your Hnry bank account at 12pm, Hnry should have your money in your bank account by 5pm or 6pm. This is the longest a payment will take on a weekday. Payment times vary from bank to bank, so it depends who you bank with and what their processing times are.
To explain what you need to know about Hnry, our guide outlines:
- Hnry Costs, Pros, Cons and Alternatives
- Hnry's Added Features and Abilities
- Frequently Asked Questions
- Concluding Comments
Important - This guide does not offer tax advice, nor does it attempt to give guidance about anything specific to your personal tax situation. Instead, we review the pros, cons, features, costs and alternatives of the Hnry app.
Hnry Costs, Pros, Cons and Alternatives
Costs:
Pros:
Cons:
Alternatives
If you want to compare HNRY vs Xero, this guide and accompanying table (and the Hnry version) helpful walks you through each app's pros and cons.
- Transparent fees - you won't be hit with any bills; Hnry deducts its 1% fee on gross earnings before it pays you, so you'll never owe Hnry anything. In fact, at the end of the tax year, the Hnry fee will be deducted from your income as a business expense and you'll likely receive a tax credit.
- Your clients can pay via credit card, debit card or internet banking, making the process of speeding up payments easier. You can connect Hnry to PayPal, Stripe, Payoneer and other payment apps. Additional fees apply for using these services (which are independent services from Hnry).
Pros:
- Hnry is a registered tax agent of IRD and ACC and highly regulated. The app delivers speed, frictionless processes, regular new features and transparency.
- Hnry offers a huge range of features that make it an "all in one" solution.
- Hnry essentially operates as if you are a salaried worker in that you receive payslips net of income tax, GST, ACC, and other deductions and ensures there is no end-of-year tax lodging etc. The built-in invoicing makes it an all-in-one solution.
Cons:
- We don't see too many; there is a charge for using the service (1% + GST of your income), which you can avoid if you manage your financial affairs via myIR.
Alternatives
- Manage your taxes in Xero: If you use Xero already for your business, you'll already be paying an ongoing subscription.However, we argue that there's a lot of effort required to manage your accounts correctly through Xero. Also, you're still on the hook for setting aside your tax money, paying it, and then filing your taxes at the end of each year.
- An offline accountant: This may be cheaper than Hnry depending on your tax needs, but an accountant won't send invoices, give you online access to payslips, a Profit and Loss report or other features offered by Hnry.
- Do-it-yourself tax: Many sole traders, freelancers and independent contractors file their taxes directly via myIR. If you're prepared to do it, there's no other cost but your time. However, if you get it wrong, you'll either overpay or underpay the IRD, both of which have financial consequences.
If you want to compare HNRY vs Xero, this guide and accompanying table (and the Hnry version) helpful walks you through each app's pros and cons.
Hnry's Added Features and Abilities
Hnry is packed with features that make the process of day-to-day client invoicing and tax seamless. We've outlined what you need to know below:
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Quote FeatureHnry helpfully lets you send quotes to clients and prospective clients, which are presented in PDF format. You can see a simple example here. Hnry lets you manage all of your live quotes in one place, and it allows you to convert quotes to invoices. The functionality is seamless and will appeal to anyone, even beyond freelancers and trade professionals. Hnry eliminates the need to send Excel-format quotes while keeping track of your leads and potential client wins.
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Invoice FeatureHnry lets you create and send invoices to your clients; you can add your business logo and details, outline fees, expenses and everything you need to arrive at the amount due. You can also insert the due date and payment options. Any relevant client reimbursements will be automatically added to invoices you create - there's no need to add them manually as Invoice lines. You can see a simple example here.
Hnry's Services To make quotes and invoice preparation quicker, Hnry's Services function lets you create a list of everything you sell with a description and a price for each. You can name these services or goods whatever you like. Hnry also chases your unpaid invoices on your behalf, which helps you get paid faster. It also prevents you from having those awkward conversations with your clients - the Hnry reminder emails are templates but we argue they are polite and professional. Important: Every time your clients pay, the money is received into your Hnry bank account, which means you'll promptly receive the net amount after income tax, GST, ACC, and other deductions such as student loan and KiwiSaver contributions. This eliminates the need to put aside money for tax and other obligations, which is at the heart of what Hnry does. |
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Client managementHnry lets you manage the clients or organisations who will pay invoices into your Hnry account. This lets you keep track of all your clients (current and previous) and quote/invoice in seconds when needed. The client management tool acts as your all-in-one customer index.
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Payslip recordsHnry shows you all the payments you've received, i.e. people or organisations who pay into your Hnry bank account. You can see an example of what this looks like here. Individual payslips appear in this format.
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Expenses and purchases filingHnry's Expenses and purchases feature lets you record your business expenses and client reimbursements so you can get the right tax relief immediately. Hnry's service also identifies assets and depreciation for you automatically.
Hnry helps you distinguish between business expenses and client reimbursements:
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AllocationsHnry lets you set up automatic allocations to apportion your income every time you get paid. These options include KiwiSaver, secondary bank accounts, investments, charity donations and prior-period tax repayments, among others. This means that for every dollar you earn gross, a percentage will be directed to your allocation(s). For example:
The allocations feature is there to make it easier for you to plan and save for your future - helping you meet your financial goals. Hnry's allocation feature lets you set up automatic payments for paying rent and utility bills and whatever else you need to do every time you get paid. Hnry lets you allocate up to 45% to one or many investment platforms - it's currently integrated with Sharesies, Simplicity KiwiSaver, Booster, Hatch, KiwiSaver, Kernel Wealth and kōura. Keep in mind, if you allocate to "KiwiSaver", the money will be remitted to the IRD and take up to 30 days for the IRD to credit it to your KiwiSaver fund. Recent reports of payment delays suggest it may be a better idea to make a voluntary contribution to your KiwiSaver provider directly via your bank account. |
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Alternative Income SourcesTo make sure you're paying the right amount of tax, Hnry requires you to enter the details of all your sources of income not paid through Hnry. For example, if you have a salaried job and use Hnry for additional income, you'll need to enter the details so you're taxed correctly. Hnry then takes over as your tax agent and ensures your end-of-year tax filing is as accurate as possible. This feature is designed to solve hassle and uncertainty.
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Frequently Asked Questions
Hnry continues to launch new features and tools; our frequently asked questions below anticipate what's important. If there's something we've missed you'd like answered, please contact our research team.
Does Hnry offer an app?
If I need help, can Hnry offer support?
Yes - Hnry's support team will explain and answer questions from their customers. There is no additional charge for this - all support is included in the fixed 1% + GST of income fee Hnry deducts on every payment you receive.
Can I use Hnry if I'm a shareholder of a company?
Yes - Hnry lets company directors take Director Drawings via its service. This means if you're a shareholder and drawdown payment, you can use Hnry to deduct your income tax etc. to send you the right net amount to your personal bank account.
Can I use Hnry's reporting as proof of income for a loan or mortgage?
We asked Hnry about this - there response was "you can use Hnry's reporting for proof of income for a loan or mortgage. Although this is up to the bank whether or not they accept it".
Concluding Comments
- Hnry is designed to give self-employed freelancers and contractors the confidence that all of their taxes are taken care of legitimately for a fixed 1% + GST fee on all income earned (the fee is capped at $1,500)
- If you don't understand something or need a question answered, Hnry's support team can help via phone, email and online chat. Best of all, there are no additional costs for this support (compared to accountants who may often charge you for the time they spend with you).
- Hnry costs nothing to sign up to, and you'll only pay its (transparent) 1% + GST fee when you receive income. This makes it a no-fee/no-risk service which is unique in the accounting/personal taxes industry.
- Hnry's features continue to expand - being able to invoice clients directly, manage quotes, set income/savings allocations and have everything accessible in an online portal and app are unrivalled features that make Hnry a very strong offering.
- More details: Visit Hnry
