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 .

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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.

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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:

Be American and pay taxes. How else will the career politicians and impoverished survive.

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If we all worked on the books taxes would go down :joy::joy::joy::joy: I’m crying at the complete and utter ignorance of that comment you probably think when you vote for the president/state senator/congressman your vote matters to
I think everyone should work under the table and say fuck Uncle Sam and his taxes all our tax money is doing is funding the politicians vacation homes, private islands, yachts and much more. It surely isn’t going into our schools for a better education and don’t even think about having our roads paved correctly and being maintained so they will last nope they go to the cheapest bidder who will do the cheapest work and by time they even get around to fixing the roads the American people who drive that road daily have probably had to pay at least 500$ each in repairs due to the fact that it’s like pulling teeth trying to get these greedy fucks to spare a little bit of money and fix the road that we are taxed to drive on in a car that we a taxed to own

They have insurance for people who do this kind of work and get payed cash like aflack and who cares if the employer is “cutting corners” trying to keep as much money as he can out of uncle sams greased and greedy pockets

My grandma worked her entire life from the age of 16 until 72 and she worked until she was 72 so she had to pay the least amount of taxes on her social security income my gma didn’t have the best job in the world but she worked for comerica until the day she retired for 44 almost 45 years and she made decent money but do you know how much social security gives her every month? 1800$ :joy::joy::joy::joy: thank god she was smart and bought a house at 28 and payed it off in 15 years and from that point on invested every spare penny she had in bonds, cds, and ect. Bc she invested her spare money she lives comfortably but if she would have blindly depended on her 401k and social security she would be struggling and probably have to stay with one of us grandchildren. it’s people like you who think the government and the politicians have our best interest in mind when they created this stuff when in all reality they didn’t even have us in mind let alone our interests smh

LOL welcome to the site Bonham

Good luck getting a home loan and if you’re cashing your guys out they will never be able to buy a home. I agree with supplementing with some bonus or weekend cash pay but keeping everything off the books just screws the employees unless they just want to live in trailers. I hate the government as much as anyone but you have to somewhat play the game if you don’t want to go to jail.

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You just made the case for paying her taxes, being responsible, and making wise financial decisions. Why in the world would she “blindly depend on her 401k”? I repeat, both parties are crooks, but you have to participate in the rules of society, especially if you have family members you would like to see succeed. As much disdain as I have towards the government system I still see people like you shunning ‘paying taxes’ and then screwing the government (Me and all other business owners paying our fair share) by either claiming unemployment or getting ‘free’ health care when you need it. By the way, you are responding to an 8 year old post.