Getting paid in cash for your hard day’s work can seem like magic. After all, it’s easier, and you can often bypass the bank account and do what you want with your money straight away. Doing this can be legit, assuming the correct tax has been deducted and you are getting your worker’s entitlements. Otherwise this is called ‘cash-in-hand’ and is illegal.
What is cash-in-hand?
Some businesses use cash payments to employees, so that they can avoid paying tax, superannuation and other entitlements to their workers. This is what we have come to know as cash-in-hand or working under the table. If you are getting paid your wages in cash, you could be:
• getting paid less than the correct award wages
• ending up up with a large tax bill because your employer has not taken tax out of your pay
• missing out on superannuation contributions
• not covered by workers compensation insurance.
When is it legal to get paid wages in cash?
If you are getting paid in cash, you should:
• receive regular pay slips showing all of your earnings and the amount of tax taken out
• get a payment summary (group certificate) each year which sets out your full earnings for the year and how much tax has been deducted
• check with your employer that you are receiving super contributions
Speak to your employer if you aren’t getting your correct entitlements. If any issues are still not resolved, check out www.fairwork.gov.au to make a complaint.
ACTU research into cash-in-hand work in 2012 found:
- Respondents aged 18-29 were almost twice as likely as the rest of the sample to work, or have worked, in a cash-in-hand job
- Males were more likely to work cash-in-hand than females
Read the full report here