Cash. One thing Tradies are notoriously known for is doing a job for cash. Cash is legal tender so it is fine to be paid in cash for the work done, but it is illegal not to declare it.
Paying wages in cash is legal and may be more convenient. Some businesses deliberately use cash transactions (for example, pay their employees 'cash-in-hand') to avoid meeting their tax and employee responsibilities.
While it is not unlawful to be paid in cash, a 'cash-in-hand' job usually means that there is no official record of the employment relationship. You may be paid in cash or by bank transfer or by cheque, but when you have a cash-in-hand job, your employer is not withholding tax from your pay.
Tax Obligations for Tradies
They include income tax, GST, and superannuation. Every tradie must pay income tax on their income. Your total taxable income would determine the amount of tax payable based on the tax rate that applies to your income bracket. Tradies whose businesses are registered for GST must pay GST.
Your employer is allowed to pay you in cash, providing that they take off the right amount of income tax and National Insurance contributions (NIC) under Pay As You Earn (PAYE), and hand this over to HM Revenue & Customs (HMRC) before paying you what is left.
It's perfectly legal to receive compensation from your employer in cash. It's fast and convenient, so even employees without bank accounts can receive payment for their work.
Cash allows you to keep closer control of your spending, for example by preventing you from overspending. It's fast. Banknotes and coins settle a payment instantly. It's secure.
This is illegal and is essentially the commission of a fraud. This would typically involve the tradie offering a discount in lieu of GST.
If your GST turnover is below the $75,000 threshold, you may choose to register. But if you do, regardless of your turnover, you must: include GST in the price of most goods and services you sell. claim GST credits for most business purchases you make.
If you are carrying on an business or enterprise or starting one, you are entitled to an ABN. As a tradie, if you are charging for your services is is quite likely you are carrying on a business or enterprise. A tradie, if carrying on a business, is required to apply for an ABN.
If you are failing to meet your employer obligations when paying your employees cash in hand, you may be committing tax fraud. In accordance with the ATO, it is a tax crime to hide cash wages and avoid paying tax.
There are no laws limiting the amount of cash you can keep at home. This makes sense as many businesses, especially retail stores, keep large amounts of money with them merely as floating cash.
Cash on hand refers to any accessible money, funds in bank accounts, or liquid assets that could be accessed within less than 90 days.
Yes, imprisonment is a possible penalty for tax evasion. However, the CDPP and ATO will take into consideration the severity of the offence. For less severe offences, penalties include discharge without conviction, fines, good behaviour bonds and community correction orders.
Sharing pay and workplace conditions information
Employees and future employees have the right to: share (or not share) information about: their pay. their employment terms and conditions that would be needed to work out their pay, such as their hours of work.
The bill to ban cash purchases over $10,000 was introduced late in 2019 as a way for the black economy taskforce to reduce tax avoidance and other black economy activities. The aim was to prevent businesses from being able to receive large cash payments and not declaring the income, thus avoiding income tax.
It's compulsory for businesses with a Goods Services Tax (GST) turnover of $75,000 or more to have an ABN and to be registered for GST.
If you make $75,000 a year living in Australia, you will be taxed $16,342. That means that your net pay will be $58,658 per year, or $4,888 per month. Your average tax rate is 21.8% and your marginal tax rate is 34.5%.
Before you register for Standard GST, you need to have an Australian business number (ABN). You can get an ABN when you first register your business name or at a later time. You only need to register for GST once, even if you operate more than one business.
What can tradies claim on tax without receipts? According to the ATO, if you don't have any receipts for your purchased work-related items, you can claim them up to a maximum value of $300. You may be eligible for a refund of more than $300 – this could boost your tax refund.
Car expenses. You may be able to claim the cost of trips between home and work when you carry bulky tools or equipment for work purposes. You can only claim a deduction for the cost of these trips if you meet all of the following conditions: The tools or equipment are essential for your employment duties.
KEY TAKEAWAYS. Lodging inaccurate or dishonest tax returns or business activity statements with the Australian Taxation Office is a criminal offence warranting serious penalties ranging from 1 to 10 years imprisonment and heavy fines. These are also considered a type of white collar crime.
If you do not declare, or do not declare correctly, your expose yourself to measures such as the temporary detention of the cash carried, and/or a penalty. This could have a significant impact on your travel plans and the availability of the funds and cause great inconvenience.
For starters, try to save $1,000 immediately for emergencies. Then, gradually build up to an amount that can cover three to six months of expenses if you are in a two-income household.
“We would recommend between $100 to $300 of cash in your wallet, but also having a reserve of $1,000 or so in a safe at home,” Anderson says. Depending on your spending habits, a couple hundred dollars may be more than enough for your daily expenses or not enough.