“Just Pay Me in Cash” – Why A Simple Sentence Can Be a Red Flag To The ATO

Cash-in-hand jobs might seem harmless - after all, what’s the harm in a quick weekend gig paid in cash?

But when it comes to tax time, failing to declare this income can land you in hot water with the Australian Taxation Office (ATO).

Why Is The ATO Concerned About Cash-in-hand Jobs?

The ATO considers undeclared cash income a form of tax evasion. While getting paid in cash isn’t illegal, not reporting that income is.

With sophisticated data-matching tools and industry benchmarks within its arsenal, the ATO can spot discrepancies between reported income and lifestyle, bank deposits, or known business activity in your field.

For example, if you’re a tradesperson, cleaner, hospitality worker, or working in another industry known for cash payments, the ATO has specific expectations for your income levels.

If your reported income falls short compared to others in similar roles—or if your bank statements show more income than you’ve declared—it could trigger a red flag.

What Are The Risks Of Not Declaring Income?

Failing to report cash income can result in serious consequences:

• Back taxes – You may be required to repay tax on any unreported income, often going back several years.

  Interest and penalties – The ATO can apply penalties of up to 75% of the tax owed, plus daily interest.

• Audit or investigation – A review of your full financial history could be triggered.

• Criminal prosecution – In severe cases, especially if deliberate fraud is found, criminal charges may apply.

It’s Not Worth The Risk

The short-term gain of keeping a few extra dollars in your pocket isn’t worth the long-term risk.

Whether it’s a few tutoring sessions, odd jobs, or regular weekend work, all income needs to be reported, even if paid in cash.

If you’ve accidentally left out some income in your return, it’s best to amend your tax return before the ATO contacts you. Voluntarily disclosing errors can reduce penalties and show that you're trying to do the right thing.

Stay Above Board

Staying compliant not only keeps you out of trouble but ensures you get the most from your return - legally and confidently.

If you’re unsure how to report occasional cash income or need help reviewing past returns, speak to a registered tax agent (like us).