‘Cash in hand’ payments to workers no longer tax deductible

‘Cash in hand’ payments to workers no longer tax deductible

From 1st of July 2019, the ATO reminds employers that any ‘cash in hand’ payments will not be considered tax deductible.

It is important that employers comply with their pay as you go (PAYG) withholding obligations.

Should contractors not supply their ABN and the business does not withhold any tax, these payments will also not be tax deductible from 1 July, 2019.

In addition to the loss of a tax deduction, penalties will be imposed for employers who are caught not complying with their PAYG obligations for failing to report correct amounts under the PAYG withholding system.