Our focus
We’re cracking down on businesses that use cash to avoid meeting their tax, employer and business obligations. We are focused on businesses that are operating outside the system by not reporting or by under-reporting cash income, paying for goods purchased by the business using cash or paying cash wages. Keeping such transactions 'off the books' is not a mistake – it’s a deliberate action that affects everyone.
Businesses that do this may:
- fail to report all sales transactions and fail to issue receipts
- avoid paying GST, income tax, PAYG withholding, super guarantee, insurance, and work cover protection
- report their income below the $75,000 threshold to avoid registering for GST
- exploit workers by not meeting award conditions and work cover protections
- undercut honest businesses by offering cheaper prices for cash.
This behaviour creates an unfair playing field for those businesses doing the right thing. It undermines the integrity of the tax system, erodes public trust and reduces funding for essential services like hospitals, schools, and roads.
The hidden cost of cash-in-hand
Workers who are paid cash-in-hand or are working 'off the books' are often disadvantaged. They typically:
- miss out on entitlements such as paid holiday and sick leave
- receive less than the award wage
- have end-of-year tax liabilities if no tax is withheld from their pay
- don't receive the super they are entitled to, impacting their future retirement
- lack coverage under WorkCover for workplace injuries.
This means they are not receiving the entitlements and protections they should be. If they are injured at work, they are not protected and may have large medical expenses to pay themselves.
How to get it right
If you run a business, it’s important to:
- report all income, including cash
- pay your workers correctly and meet your ongoing employer and super obligations
- keep accurate records and use digital tools where possible
- register for GST if your GST turnover is $75,000 or more.
Small businesses often rely on tax professionals to help them stay on top of their tax and super obligations. These professionals play a vital role in supporting the integrity of the system by asking the right questions about cash income and ensuring businesses report correctly.
We use sophisticated data and analytics to detect businesses that aren’t doing the right thing. Our compliance teams, along with joint operations across government agencies, are actively targeting cash-only businesses that deliberately avoid their obligations.
If you suspect a business is avoiding its obligations, you can report it to our Tax Integrity Centre.
If you're an employee who is paid in cash, you can refer to receiving cash for work you do.
Example: Failure to report cash income
Mario runs Zavollo Pizza, a popular pizza shop in Brisbane. The business operated mostly on a cash-only basis, with some payments through PayID, and also earned income from an ATM installed at the shopfront. Customers were often told to withdraw cash from the ATM to pay for their orders.
Despite these practices, Zavollo Pizza didn’t keep accurate records and failed to report all their income. A previous audit in 2023 had already resulted in a 50% penalty for reckless behaviour but the problems continued.
An audit was carried out for the 2024 income year after we received a community tip-off about possible under-reporting. We found:
- around $140,000 in income was not reported, consisting mainly cash and unreported PayID payments
- about $80,000 in expenses were claimed without proof, including car costs, phone bills, insurance, and interest.
The behaviour was considered intentional, not just a mistake.
As a result, we issued:
- adjustments to GST reporting resulting in a GST shortfall of over $17,400
- a 75% penalty for intentional disregard, plus a 20% uplift on the GST shortfall resulting in penalties of over $11,500
- a shortfall penalty of over $38,000 was imposed as they made false and misleading statements when reporting their cash income.
This case shows how important it is for small businesses to:
- keep accurate records of all sales and expenses
- report all income, even cash payments
- understand that ignoring tax obligations can lead to serious penalties and extra costs.
Keep up to date
Keep your small business on track by staying up to date with the latest tax and compliance information. Learn more by taking our free self-paced online courses designed to help small businesses get it right:
- Recording business income and expensesExternal Link.
- Essentials to strengthen your small businessExternal Link – a suite of courses to help you build confidence in managing your obligations.
- Small business benchmarks – compare your performance against similar businesses in your industry.
You can also:
- Subscribe to our free Small business newsletter to get updates that might affect your business.
- Contact your tax professional to obtain advice specific to your business needs.