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Risky Business: Kiwis Doing Cashies

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The idea of working for cash is tempting, even more so when you’re sick and tired of paying tax on everything! From a business owner perspective it’s even more tempting: think of all that time you’ll save from not doing PAYE, or dealing with tax forms, and better yet, no Kiwi Saver or ACC paper work to worry about either. Despite being completely illegal, a lot of New Zealand employers take the risk of offering under the table jobs to students and people new to the country, who might be unfamiliar with labour laws. Tradies are notoriously pro-cashie, so is the hospitality industry, in fact, New Zealand as a whole has always had a rather complacent attitude towards working under the table. But it’s time to pose the question: are cash jobs really worth the risk? 

Of course, it’s not the cash aspect that’s the illegal part: it’s about not recording what you’ve paid out or what you’ve been paid. In simple terms, that’s tax fraud. If you’re making money or paying out money, but keeping this information on the down low from the IRD, you can guarantee that it will catch up with you eventually. 

Trouble 2.0: IRD Style

For people working or paying under the table, you’ve got to watch your back. The Inland Revenue Department is cracking down on this so-called “black economy” after decades of frustration. The information has slipped that there are hundreds of tradies doing cash jobs worth tens of thousands of dollars. The scale of this form of tax dodging is massive, particularly in Auckland where over twenty five percent of trade jobs are paid on the sly. 

The problem with this level of under the table work is that adversely affects the industries that promote it and the financial eco-system of New Zealand. We’re not talking about a bit of cash on the side anymore; we’re talking about tens of millions of dollars of extra income that isn’t getting taxed. The bottom line is that it’s simply unfair to the millions of New Zealanders who pay their taxes. 

Over the last few years the IRD have spent thousands on campaigns to bring awareness to this tax dodging, especially in the cash centric industries such as hospitality, building, construction, and electricians. If you’re not willing to file the paper work, then you’ll be facing charges instead. Whether you’re in fisheries, forestry, hospo or construction, it’s time to pay up properly!

The Not-So-Hidden Economy

There has been a big brouhaha in the news recently about New Zealand’s role as a global tax haven for the rich – but it seems like the bigger problem is right under our noses. The IRD has cracked onto the cashie industries and is taking steps to snuff it out. Through benchmarking the expected financial ratios for various industries, the IRD will be able to target sectors that have always turned a blind eye to under the table work. These benchmarks will help the IRD determine exactly how much a business should be making, and compare this to what they’ve claimed for a tax year. If there are discrepancies, the business goes through a vigorous audit to sniff out the hidden cash. Penalties and fines ensue! For certain sectors that deal with a lot of cash, and therefore have more to gain from under-reporting income, the party is over.


Cashies in New Zealand cost the Government over seven billion dollars a year. With an aim to collect over six hundred million tax dollars of the next ten years, the IRD mean business. They’ve already taken in one hundred and twenty million dollars by clamping down on the tradies. It’s worth remembering that the IRD has a lot of resources at their disposal to find out where all the tax dodgers are hiding and you could be next if you’re not playing ball.


Cash Job Trade


Reasons to Avoid Cashies

While you may think you’re saving money in the long run by paying someone under the table or receiving cash jobs, you’ve got to consider the other risks involved:


  1. Quality: If you pay a tradesperson under the table and the quality of their work isn’t up to scratch, you’ll have no way of proving this in a court of law. To avoid this, always ask for a quote, and an invoice upon payment, and insist on direct debit or credit card payment to ensure a paper trail to cover the work you’ve paid for. It’s also worth noting that if your tradie hasn’t followed the proper consent processes, the work won’t be covered by your insurance.
  1. Honesty: Is the best policy. How is it fair for some Kiwis to be paying taxes while others don’t? Well, it’s not. Each dollar of hidden income results in a loss for the nation: this is money that is used for infrastructure, schools, hospitals, and social services. Don’t you want to sleep well at night? Well then, pay those taxes!
  1. Repercussions: Here’s a head’s up – serious cases of tax avoidance will result in jail time or community service, on top of the money you have to pay back to the Government. Cashies are a gamble: you’re taking the risk that you may be landed with a huge payout or an even bigger fallout. It’s up to you whether or not you want to gamble your freedom away.


How to Do Cashies Right

If you’re being paid under the table it’s up to you to pay your tax on that income. But before you go saying yes to these cash offers, think about what’s in it for you. When an employer is offering you money under the table, they don’t necessarily have your best interests in mind. By paying you on the side and off the books, they save on paying their PAYE, holiday pay, and superannuation or Kiwi Saver. The best part for them is that under New Zealand laws you’re not seen as an employee, which means you have no legal standing if the employment relationship goes pear shaped.

If you earn the bulk of your wages in tips or cash, you need to talk to you employer about the best way to report this income. The best way to avoid any problems is to keep a written copy of all your earnings that you can hand over to your trusted tax agent at the end of the financial year. Your employer should be keeping track of the amounts they pay you too. If they’re not they’ll receive some pretty harsh penalties to deter them from making the same mistake again. If you have to, remind the person offering you the cashie about the consequences of this kind of work. And then start looking for a job where your boss follows the rules and has consideration for your financial well-being.


Cash Job IRD

Do the Right Thing

If you’ve been doing cashies for some time now and you haven’t been declaring this income, you need to know that you can make things right. While it’s fine to do cash jobs for your buddies, just record the amount and put it on your tax return – no matter if it’s ten bucks or ten thousand!

And if you’ve made the mistake of not declaring your under the table income in the past, you can set things straight at any time. By making a voluntary disclosure, you can avoid prosecution and even have your shortfall penalty wiped. Sounds good, right? Not to mention the warm fuzzies you’ll feel by doing the right thing and paying those taxes that keep our incredible country so, well, incredible.

So there you have it – while cash-in-hand jobs may seem appealing, the only person who is really benefitting is your boss or the person commissioning your work. The appeal of some sweet cash on the side is understandable, but in the long run it’s not going to help you, your work, your industry or the New Zealand economy. You know what to do. If you’re getting paid cash, just report it when you’re doing your taxes. Or at least let us do it for you. Do the right thing and get in touch with us today if you have any questions.






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