An employer can legally pay you in cash in Australia. There is no law that requires wages to be paid by bank transfer. However, cash payments do not exempt either you or your employer from your respective legal obligations, and there are important things to be aware of before accepting this kind of arrangement.
Your employer's obligations still apply
Even when paying cash, your employer is still required to deduct the correct amount of tax from your wages (or apply the correct PAYG withholding rate), pay superannuation contributions on your behalf, provide you with payslips, and comply with the minimum wage and award conditions that apply to your work. The method of payment does not change any of these obligations.
Many employers who pay cash do not meet these obligations. They may pay below minimum wage, skip superannuation, and provide no payslips. This is not a feature of cash payments itself but a common pattern of non-compliance that tends to accompany them.
Your tax obligations when paid cash in hand
All cash income is taxable in Australia. You are required to declare it in your tax return at the end of the financial year. The ATO has ways of identifying undeclared income and the penalties for tax evasion are serious. Keeping your own records of what you were paid and declaring it honestly is always the right approach.
Missing superannuation
If your employer is paying you cash and not paying superannuation, you are missing out on 11.5% of your wages in super contributions that you are legally entitled to. The ATO has a process for reporting employers who fail to pay super and can pursue them for the outstanding amounts.
When cash arrangements raise concerns
If an employer is insisting on cash and asking you not to mention the arrangement to anyone, that is a sign that the arrangement may not be compliant. Protect yourself by keeping your own records of hours worked, rates agreed, and amounts received.
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