Hourly Payroll, 1099 Vendors, Voucher Checks

A couple of quick questions for those with experience in the Akaunting's Apps. I'm trying to leave QuickBooks Pro for our small historic restorations firm. I have been unable to find answers to the following questions.

1) Does the "Check Printing" App support printing on pre-printed voucher checks (full sheet with the top being the check and the bottom being two sections with check details that tear off for stapling to a bill)

2) 1099 Vendors (USA taxes) are not trackable in the base Vendors module. Can the "Custom Fields" App be used to add a radial to each vendor that says "Is this a 1099 Vendor: Yes or No" and then a field for typing in their tax ID? Can a report be made to show these vendors at the end of a year?

3) Payroll is a bit of a beast in Illinois, USA. Does the Payroll module support performing automatic calculations for taxes and deductions that are based on percentages?

4) Can you put a limit on payroll deductions so that after a certain value they are not longer removed from the paycheck (i.e. after 7,000USD a tax is no longer calculated)?

5) Can the payroll module handle people who are on an hourly rate or multiple hourly rates (everything I have seen talks about salary)?

6) Can voucher payroll paychecks be printed with the "Check Printing" App.

I know these are a lot of questions, but any answers would be helpful. I have already bought the double-entry module, but I can't spend money on the rest without knowing if it would work. Thank you in advance! -Chris, Heritage Restoration

Hi Chris,

Thank you for your interest in Akaunting. We will be very happy to help you during the process. Let me know if you have more questions. In the meantime, you can find answers to your questions below.

1- Yes Check Printing App supports printing on pre-printed voucher checks
2-Yes you can add a Custom Field as in type "select" with the Custom Fields App.
3-Not at the moment. Actually, if you kindly explain this question in detail so that we can implement or develop this function in the Payroll App. Cause there are many countries with different tax laws.
4- It wasn't planned or requested. Though, could be implemented probably.
5- If you mean to set an hourly rate for an employee and then provide the exact amount of worked hours in a run payroll - then no, it can't do this. You may only provide the already calculated amount as a payment (benefit) to pay for worked hours. Could look like in the screenshot attached.
6- Not possible at the moment.

Hello Melda,

Thank you for your response. Our small business has been exploring open-source alternatives to QuickBooks Pro + Payroll Module (desktop version). The United States (particularly the Midwest region) is mixture of legacy methods of doing business and complicated tax laws, both of which are often unfamiliar to the international open-source developer community. For example, ACH transfers are under-utilized by many smaller organizations, checks are still the common method of transferring money. Payroll is often subject to conditions (rates/limits) which modify values. As per your request, I will try to explain below:

1) Great, glad that feature exists,
2) Okay, the field can be made. Can a report show all of these vendors and their net values at the end of the year?
6) Okay, this is just used as a paper reference for employees to see if their deductions/tax were taken out properly.

3,4,5) I will try to offer a simple explanation of US payroll (if I can). First, employee compensation can be determined by hourly wages or salary basis. Hourly employees need to be allowed to receive multiple rates; for example QuickBooks allows employees to have multiple rows to record hours for user-predefined rates (standard hourly, 1.5x overtime pay, double overtime pay, government defined rates per project, etc...). Example: and employee works during a week for 20 hours of standard pay, another 20 hours on a state project with its own mandated pay rate, and then 5 hours of standard overtime pay. These hours are then multiplied against their matching rates and then summed together to become the pre-deduction gross pay. Next come pre-tax deductions, these are taken out of the aforementioned pre-deduction pre-tax gross pay (medical insurance, some retirement contributions). After pretax deductions, the new gross pay number is then subjected to tax calculations. State Income Tax might not exist, might be a fixed rate (IL is 4.95%), or it might be a percentage based on a graduated tier. Federal Income Tax is next and it's a mess. The tax is based on tables that use variables such as an employees pay period (weekly, monthly, etc..), how many tax dependents they claim, and the employee's expected annual gross pay. Our government tax agency give a form called 2021 IRS Publication 15-T to help determine what percentage to multiply against the employees gross pay. The next tax is social security (6.2%) which is a flat percentage, but after a threshold of $142,800 gross pay, the tax stops. Medicare Tax is next. It too is a flat rate (1.45%), but after $200,000 an additional tax of .9% get added. Lastly are the post tax deductions and these tend to be flat values unique to the employee or company.

So net pay is reported as "pretax-deduction gross pay" less "the pretax deductions" less "all applicable taxes" less "post-tax deductions" equals "Net Pay"

Add one more layer of confusion, the employer must also pay matching taxes for Social Security and Medicare. Also some matching deductions.

If I had to put my database hat on for a moment. The solution to add better payroll functionality into Akaunting for US users and users in other nations with complex tax laws is to make a settings page where Akaunting user can build their own payroll calculators. Using line items with drop-down menus for each field. Example: Item Type (pretax deduct, tax, posttax deduct, employer matching), Calculate off (pretax-prededuct-gross, pretax-gross, gross, net), What numerical function (/,*,-,+), What corresponding value (flat value, fixed percentage, employee page variable, input at time of payroll run), Conditions (Always apply, apply after variable is met, apply before variable is met). Something to this nature, my apologies I didn't get a chance to firmly draft out the design logic. The goal would be that users can build a system to fit their country and allow for changes to be made when the tax code changes (US is famous for this).

The whole hourly rate thing would have to be done on the employee's page with the design allowance for multiple named rows each with their own value. When payroll runs are done for each employee a number of hours is entered into each row, with 0 being the default for unused rows.

Sorry for the wall of text. This is a simple as I could make it. -Chris, Heritage Restoration.

Hi Chris,

Thank you for the detailed explanation. We appreciate your effort in taking the time and explaining to us. I have forwarded your detailed request and explanations to our developer team. They will be doing the necessary researches.

In the meantime, your second question with the Vendor Reports is not present at the moment.

Hello Heritage,
1099 Form will be available by the end of this month on the App Store.

I am start working on it next week.

Thanks,

Leonardo,

Thank you for working on the 1099 Forms. It's features like these that had previously given QuickBooks (Desktop and Online) their edge in the US accounting software market. As a small business (11-20 employees), we can't afford to spend much on administrative staff (such as bookkeeping). QuickBooks' "value add" for many smaller outfits is that it automates most tasks so that a single person can handle tax reporting, payroll, A/R, A/P, etc... With a couple of clicks your reports are made, so that you can fill in your tax forms. 1099s and Payroll calculation support are very important components of accounting software in the States. Akaunting is so close to being a major disruption in accounting software market, which have been extremely stale since QuickBooks rise to market control. If you have any questions that I can help with, please feel free to reach out!

Regards,
Chris, Heritage Restoration