Cash pay vs. "on the books"

Hi Guys!
I’ve been roofing for about 25 years, and I’ve worked for about 5 different companies throughout those years…whenever I seek new employment with someone and the topic of my pay comes up, I’m usually faced with a decision: cash pay, or “on the books”…and there’s usually a $3-$5 difference; E.g. $20 cash or $25 “on the books”…or when starting out years ago as a laborer; $12 cash or $15 OTB…$15 cash or $18 OTB…$18 cash or $22 OTB…
one company would let a guy get partial cash and partial OTB…and once i was getting $25 OTB and everything over 40 hours was cash…
I totally understand MY advantage in whatever choice i make, of course…but what does the boss gain? why is there a few dollars difference?
My curiousity is piqued…just another facet of business that i’d like to understand…and this may just be a practice in MY area only…Massachusetts (northeastern Mass). i dunno…

I wonder why this post hasn’t been responded to. Hmmm.

Roofing is a dangerous profession. Working on cash you get hurt you are, well…f’d. Broken leg easily exceeds your financial gain of one year:

Your $3 a hour x 40hrs x 52 weeks a year = $6,240.

Sitting home for 2 months is another lost income of $8,000 if you are making $25.00 hour.

Be American- go on the books and pay taxes like everyone else.

Have your boss provide the necessary insurance coverages, maybe he will charge more being legit and the whole industry benefits from it!


The employers may be trying to cut corners on workers comp insurance and payroll and unemployment taxes. Be careful, first off, this is illegal, tax evasion. Secondly, you are taking a huge risk. If he doesn’t carry any work comp and you get hurt you could be S.O.L.

When you figure what you would have paid in income tax form the higher amount it probably works out about the same for you, except that you are doing something illegal and might not have insurance protection.

The Canadian breakdown:

As an employee if I get $25 p/hr, I would make $1000 in 40 hr. But I would pay out:
Federal Income Tax…$155.87
Unemployment insurance…$18.80
Canada Pension Plan…$44.00

After “The Books”…$781.33

Assuming I would get $20 CASH I would only make $18.67 more, but I would lose unemployment insurance, not have the chance at Compensation, and be evading income tax.

Employer pays:
Unemployment Insurance…$26.32 (employers pay 1.4x what the employee pays)
Canada Pension Plan…$44.00 (employers match employees portion)
Worksafe BC (WCB)…$120.00 (steep slope roofing is 12%, goes up with infractions)

By The Books…$1190.32

He could save $390 by paying me cash. But if WCB ever came by a jobsite he would be absolutely screwed by them. Also, he get’s to write off the unemployment insurance, CPP and Worksafe BC payments, so that leaves him with $190 of tax free cash.

When I started roofing I did it “under the table” for 3 years, then Revenue Canada came after me, OUCH!. Needless to say I do my taxes religiously now and I learned how to write things off as well.

If you do decide to take the under the table route make sure it’s cash & not check. That way there’s no paper trail. Because he’ll turn your info over to the Dept. of Revenue or IRS if he gets audited or into trouble. He’ll say you’re a 1099 labor contractor if he has proof like signed checks from you. So, don’t give out your s.s. # either. If your getting cash he doesn’t need to know it. I’ve been there, done that. They’ll throw you under the bus in a second! Like the other guys said on here before me, working under the table makes comp. insurance & unemployment insurance unavailable to you. If you did break your leg you could still sue the homeowner’s insurance. Then the homeowner’s insurance would counter sue your boss’s insurance. Back to what they gain by paying cash is getting out of payroll taxes, unemployment insurance, & the big one comp. insurance. Especially overtime comp. insurance, it’s through the roof! They make out like bandits paying cash! Plus working for cash u don’t get health insurance, 401k retirement, or anything. : (

Terrible advise.

I wasn’t giving advise. He simply asked a question & I simply answered it to the best of me knowledge from what I’ve experienced throughout the years. You don’t always meet & work for the nicest people in this business/trade. I’ve gotten seriously hurt a few times throughout the years. You think these company owners would come by w/ a dozen eggs & gallon of milk for my kids? Hell no! When you get hurt you’re on your own! You never hear from these clowns! I’ve also seen that sometimes guys ask for 1/2 cash & 1/2 on the books to trick child support enforcement. To answer that question. There’s so many different reasons for so many different questions. R.R. I see you’re out of Lowell, who you working for now?

Benefits for employer to pay cash:

No payroll tax
No WC rate
No GL insurance on workers
No accountant fees
No payroll fees
No Unemployment Tax

It’s easier right?

Him paying you a few dollars more in cash is BS. If he was to say “Hey if you guys get this set of roofs done this week and really hussle with it but keep the quality good i’ll throw you each an extra $100”

That’s cool.

At the end of the day remember. If your not paying in your SS benefits you will get NONE. Don’t take the short term way, take the long term way. Around here when people are looking to pay guys “cash” they are usually offering less per hour, and really the employer is the only one gaining. It’s silly to me. IF your going to run a business run it right or throw in the towel.

Then again I’m banging my head against the wall fighting the “super low prices” other guys are charging since they hire the “under the table guys”.

Do you realize if everyone started working “on the books” and the cash guys were gone taxes could go down?

Sometimes when you’re starting a company you can’t afford to do it all right & pay all that stuff. Sometimes you have to deal in cash for a couple of years until you’re totally established. Especially competing against guys who use drunks, druggies, & illegals!

ummmmm…I AM on the books… I DO pay taxes…and I AM American…I had to reread my post and see where I lead anyone to believe otherwise. I’m stumped.
There’s only 5 of us employees and all 5 are on the books…but i was talking to a fellow roofer who gets paid cash (I have at times in the past also) and we were discussing the pro’s and con’s…and i totally understand MY advantage in whichever choice i choose…but we were both wondering why the employer offers an option. there must be an advantage for him also, either whether the employee gets paid cash, or OTB…but why the $3-$5 difference?
Thank you bcdemon, but that canadian stuff is all greek to me. it’ll probably confuse me more if i try to understand it. lol

R.R. I wasn’t talking about you. I was trying to explain myself to RPGC & that Vermont guy.

bob. s
i wrote that after the first couple responders…i just forgot to submit it…and when i finally did i didnt know there were other replies…

Ya, I lived in Lowell for awhile. I used to work for Triple A Roofing on Wellman St. over by Wang, they later became Specialized out of N. Billerica. I worked for Delta before they became Tecta. Also for Jay Macanespie @ FMI when they first started out. Last fall I meet a couple guys out of Lowell & subbed myself out to them, 1099. They were cool, Dan & Paul @ Constitution Contracting. They do a lot of Ib & TPO. We would work 6 or 7 & get paid for 8, or 81/2-9 & get paid for 10. They bought coffee & donuts everyday. Real nice guys.

If the employer pays cash and doesn’t record it in the books, he can illegally avoid the WC, payroll taxes etc. that everyone mentioned above but then he loses the deduction for the payroll expense which is just self defeating and doesn’t make sense.

I’m just starting my own business in Ontario Canada after working for a single roofing company since 2005, and it’s definitely hard financially. I don’t have “employees” at the moment, but it will be an eventuality. It is very difficult to start into this kind of business AND be able to guarantee employees any amount of work since it’s totally dependant on available work. Which relies on advertising etc, otherwise known as money. So I can see how any cost saving methods could be appealing. So paying workers in cash can be an employee retention incentive for slow periods or small jobs where the revenue bracket is much narrower.

Therefore, it IS easy to see the appeal in paying workers cash money at the end of the day. Personally, I think it’s OK once in a while depending on the kind of job. EVERYONE tax evades in some manner or other throughout life, so judging others for any form is a little hypocritical. In the long run it’s just a really poor business practice and in reality doesn’t benefit anyone. It also puts everybody involved in serious financial risk.

The easiest way to put it into perspective is to think about yourself working for cash, falling off the roof and receiving paralyzing injuries or dying. Any surviving family will be left with an unimaginable legal battle with both the “employer” and the government, with very little chance of receiving any compensation from either. Especially if the business is incorporated and files for bankruptcy. Now your in a wheelchair or dead and your family is left paying for everything out of pocket. Ouch.

Y’all don’t have somekind of social security in Ontario, Canada like we do in the U.S.A.? Or homeowner’s insurance?

Here in Ontario we have what’s called %between%WSIB (Workplace Safety Insurance Board) which pays employess for time off work due to work related injury. The employer is obligated to pay into this insurance on the employees behalf as a percentage based on company revenue.

However, as a homeowner I can hire a contractor to work on my house and they don’t have to have WSIB coverage, unless they have employees. If I am hired by a business or do work on any commercial or income property, I and any employees then have to be covered by WSIB. There are enormous fines for non-compliance and infractions which is a huge incentive for people like me to make sure my premiums are paid. Any fines incurred are inescapable even by bankruptcy.

Yes, we have homeowners insurance. But it is only required by the banks/lenders if you carry a mortgage. But even if you don’t carry a mortgage and get sued, you don’t necessarily lose your house. In the event it is taken as compensation, the bank/crown will sell it for less than the market value for a quick turnaround. Either way it will likely come up short of the 1+ million that you’re being sued for. The homeowner could potentially be sued by the contractor, but it would be hard to do unless the injury was due to flagrant negligence of the homeowner. Even still, in most instances it’s the contractors obligation to ensure they practice safe work habits and inspect all areas before commencing work.

In Canada it’s not the homeowners responsibility to insure people who are falsely represented as employees by a contractor. The legal system governing liability is a little different up here. I have $1M personal liability against personal/property damage and the gov’t takes care of any properly covered employee that gets hurt on the job. It’s not always a perfect system, but neither is suing someone into oblivion for your own stupidity. There is no perfect system.

The government is paying more attention than it ever has. Better safe than audited/bankrupt.

Guy from Ontario. I didn’t mean something like worker’s comp.? I meant social security. In the U.S. it’s something we pay into every week, along with our taxes, then we get that if we become disabled or when we retire. Do u guys have something like that in Canada? Back to the cash thing, down here in the U.S. there’s a lot of contractors using damn illegal Brazilians & Guatamalans! How can they pay these guys on the books if guys don’t have social security #'s or tax i.d. #'s? They can’t & don’t.

“Do you realize if everyone started working “on the books” and the cash guys were gone taxes could go down?”

I just fell of my chair laughing at this one.