Why you shouldn’t pay your contractor cash

Posted By  
08:00 AM

Paying cash in hand has long been a practice among tradies – no matter what specific field they’re working in. Often, those utilising their services and putting a few fifties in their hands don’t realise the risks and legal issues surrounding it. It’s also common to hear: “If you pay in cash, I’ll give you a discount.”


So if this is such a preferred method for concreters, why exactly does it matter how you pay for their services? Essentially, there are two issues that you need to consider if cash is the route you’re going to be taking:


  1. Is the payment legal if it is in cash?
  2. How can you protect yourself in a similar situation?


In this post, we’re running through what you need to know if your concreter says “cash only, cuz”.


Why is cash such a big deal?


Oftentimes, tradies and concreters may you a discount, if you choose to pay cash in hand.


Ultimately, paying in physical cash means instant payment for the contractor, but beyond that, it saves them the hassle of chasing up outstanding invoices. However, a majority of tradies ask for this kind of payment, due to their ability to avoid paying taxes on that particular job (e.g. GST).


This is highly illegal and can actually be classed as fraud.


Where GST comes in


In Australia, all materials and labour are subject to GST. This should be on any invoice submitted to you (if they’re within the income bracket) and must be remitted by the tradie to the Australian Taxation Office (ATO).


If they fail to do so, there are legal penalties involved, including fines that are bestowed upon the business owner. As the ATO heavily monitors this, it’s important to make sure you’re not caught up in the mess.


How you can protect yourself


If paying in cash is something you’d rather do, there are ways you can protect yourself from the drama that can unfold:


  • Make sure they give you a receipt for the payment you have made. This must be in paper and easily accessible.
  • Ensure any invoice you are given has the words ‘Tax Invoice’ on it, as well as an ABN from the tradie.
  • If you’re in doubt, have a contract created for your particular job, with GST inclusive.
  • Make sure the business you are using has a registered ABN and licence if it is required.
  • Consider what kind of legislation or regulations may apply to you, in your local area.


All in all, if you don’t feel comfortable with the situation, it’s always best to find a concreter who doesn’t take shortcuts or take any risks. More often than not, the safest approach is to not pay cash – no matter the discount they’re promising.


We have over 35 years’ experience in building and construction across Sydney. Contact our team to find out how we can help you with your concreting job. Call us now on 0414 093 100 to get started.