Cash-in-hand payments to workers no longer tax deductible
The ATO has recently reminded employers that ‘cash in hand’ payments made to workers from 1 July 2019 will not be tax deductible.
‘Cash in hand’ refers to cash payment to employees that do not comply with PAYG withholding requirements.
Further, payments made to contractors where the contractor does not provide an ABN and the business does not withhold any tax will also be not deductible from 1 July 2019.
In addition to denial of the above deductions, the ATO has stated they will penalise employers who fail to comply with their PAYG withholding requirements.