Yes, you can and must lodge a tax return if you worked cash in hand in Australia. Cash in hand payments do not exempt you from your tax obligations. All income earned in Australia is taxable, regardless of the form in which it was received. Failing to declare cash income is tax evasion, which carries serious penalties.
What cash in hand work means for your tax
When you work cash in hand, your employer typically does not deduct tax from your payment before giving it to you. This means no PAYG withholding has occurred. The full responsibility for paying tax on that income falls on you, and the way you do that is by declaring it in your tax return at the end of the financial year.
What records you should keep
Even when being paid in cash, you should keep your own records. Note the dates you worked, the hours, the rate of pay, and the amounts received. If the employer pays you weekly, keep a record of each payment. If you have text messages, emails, or roster notifications that confirm you worked and what you were paid, keep those too. These records are what allow you to accurately declare your income and defend the amount if the ATO ever asks questions.
What about superannuation for cash in hand work
If you were employed (not contracting) and were paid cash in hand, your employer was still required to pay superannuation on top of your wages at the 11.5% rate. Many employers who pay cash in hand do not do this. While it is difficult to chase up after the fact, it is worth knowing your rights. The Fair Work Ombudsman and the ATO both have processes for reporting employers who fail to meet their super obligations.
What if you were not given a payslip
Working without payslips is common in cash in hand arrangements. This makes it harder to verify exactly what you were paid, which is why keeping your own records throughout is so important. If you are unsure of the exact figures, use your best estimate and be consistent. An honest return with slightly imprecise figures is far better than not lodging at all.
Need help?
Had cash in hand work? We can help.
We help working holiday makers handle tax returns that involve cash in hand income. Get in touch and we will guide you through what needs to be declared.
Get in touch →Keep reading →
What is the Australian financial year and when does it start and end?
Australia uses a financial year that runs from 1 July to 30 June, not the calendar year. Here is what that means for your tax.