Cash income and payments – don’t hide or the ATO will seek you out

ATO focuses on businesses that use cash to avoid their tax and business obligations.

Using cash to avoid your tax and business obligations isn’t just a bad habit – it’s a deliberate action that affects everyone.

Businesses that under-report cash income or pay workers ‘off the books’ create an uneven playing field and put themselves and their workers at risk.

This behaviour undermines the integrity of the tax system, erodes public trust, and reduces funding for essential public services like education, defence, and infrastructure. It also gives dodgy businesses an unfair advantage over those doing the right thing.

Businesses that use cash to hide their activities may:

• fail to report all sales transactions and provide receipts
• fail to pay GST, income tax, PAYG withholding, super guarantee, insurance, and WorkCover
• report their income below the $75,000 threshold to avoid GST registration
• exploit their staff by ignoring the award conditions and work cover protections
• disadvantage honest businesses with cheaper cash prices.

These practices can lead to serious consequences, including penalties, audits, and reputational damage.

Businesses that pay workers in cash and don’t declare it risk significant fines, while staff miss out on important entitlements like sick leave, holiday pay, super contributions, and WorkCover protections.

ATO uses sophisticated data and analytics to detect businesses that aren’t doing the right thing. ATO is actively targeting cash-only businesses that deliberately avoid their tax and business obligations.

If you run a small business, it’s important to understand your responsibilities and take steps to get it right. Accurate record keeping, reporting all income, and paying workers correctly are essential. If your turnover reaches the GST threshold, you need to register and comply with your obligations.

Don’t put your business or your workers at risk. Find out what you need to do and access practical resources to help you stay on track.

For more information, visit the ATO focus areas for small business.

For tailored advice about your tax and super needs, speak to RA Advisory’s registered tax practitioner.

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Source: ATO