Cash pay vs. "on the books"


It might be tempting for employees or subs to get paid cash and for companies to pay cash. But chances are high that neither one is going to report that income or payment. So you have an issue there from an IRS point of view that frowns on unreported income and payments. I don’t ever look forward to the IRS frowning on me :frowning:

All good points here too about the company not reporting it for work comp and liability. For a roofing company those are among the highest costs of doing business. Even though it might save you some money to not report everything, if you really want to be a reputable company you need to report all income and payments. It’s not always easy, especially when you are first starting out. But if you get in the habit of doing it right, you’ll be a bigger success…and have less sleepless nights.


Sorry, yes we have a disability pension and an old age pension equivalent called CPP (Canadian Pension Plan). If you have an employer, you pay half the required contributions and your employer pays the other half. If you are self-employed, you make the whole contribution.

We also have EI (Employment Insurance) which is another wage deduction but not mandatory if self-employed. If you lose your job for reasons of no fault of your own, then you can apply to receive unemployment benefits for a certain amount of time while you seek new employment. I think the max is 12 months and it is based on your employment history (how long you were consecutively employed) which personally I think is too long. It gets abused regularly, similar to welfare benefits…

My opinion on cash work is that there are certain acceptable limits. I’ve openly admitted to my accountant that I will continue to accept cash payments for certain work. Small businesses with high wage overhead have to consider this an option to offset huge tax incursions. Also, cash jobs are a convenient way to provide cash (undeclared) bonus’ to employees. This is only recommended when you know your employees very well, like or as family. It has it’s risks, but most often for small businesses here in Canada the CRA will simply just demand the back-taxes on any revenue that you’re caught hiding. You will also be placed on a “red-flag” list and risk auditing, but generally they don’t come down as hard as people think or expect unless you’re a repeat offender. They understand that the existing system takes into account for cash dealings, therefore enabling them. One of the those vicious cycle things.

The company I work for would average 3 to 5 cash jobs per year, with maybe 1 or 2 being over $5000. I’ve also seen half-and-half jobs, half cash and half “on the books”. This usually pertains to smaller jobs like garages, sheds, outbuildings, etc and usually reserved for family or folks they know.


Okay,lets say half the employers business is new construction where he himself receives a 1099- the other half is tearoffs and repairs where he receives cash or personal checks that he cashes instead of depositing.Need I say more ? 0 for WC 0 for Mr Fed 0 for Mr STATE.


Wait wait 25 years roofing and $25 a hour. Assuming you have a license speak English are not a stoner and show up to work everyday. Come to NY 1 day work if you got skills you’ll be smiling when payroll comes around


As a roofer who’s now 72 yrs old I can tell you I regret all the years of weekend work I did off the books ,my pension of $5,700 a month would be around $7,000 a month ,the $3,100 in social security I collect would be over $4,000 ,when I was young I worked for 10 years off the books and lost 10 yrs of pension ,put that with all the cash weekend work and it’s made me work until I was 67 ,you don’t think about it when your young but every dollar on the books counts when you get my age .


As for taxes, you need to find a simple and quick way to fill out tax forms. I’m using PDFfiller online tool. It is NOT FREE, but the price does not bite.


All my employees are 100% on Payroll, it is better for them and it keeps my company working legally.
Cant believe there are still folk paying cash under the table.


I like what Detroit Journeyman had to say. I mean, there are a lot of good responses here, so I don’t need to repeat anything. There are a few answers I didn’t really think about before now either. Being able to collect the extra money from a pension or the government in the long stretch is one of the best reasons to really make sure you are on the books. Well, that and it’s the right thing to do. :wink: