Is it legal for an Employer to Pay you cash?
I just started a job in a restuarant and thought i would be getting paid with a check. The Employer pays me cash and tells me its better for me. He is taking money out of my check every week, but how do I know where that money is going to? He says at the end of the year he will only put me down for low amount so i will not be taxed much..I find this to be unacceptable and illegal, what can i do about this?
Answer:
Read a US bill. Right on front of the bill it says- This note is legal tender for all debts public or private. So, paying in cash is fine. BUT, lying to the IRS about amounts paid IS illegal. Under reporting your earnings would lessen the amount the employer pays in social security, and could also affect YOU, in that IF you become unemployed later, your benefits would be lower if your earnings were lower. Now, I suggest that if you don't like the arrangement, work elsewhere. Sure, you could report him, but I doubt this is a large scale business, or that anything much would come from trying to make waves. Work where you are paid by check, if you wish.
take the cash...go with the flow...or quit
It is legal to be paid in cash, as long as there are keeping track of exactly how much you are paid and how much is deducted for social security, taxes (federal, state, local), and medicare. Your employer must still give you a W-2 at the end of the year to file your taxes.
p.s. Sounds kind of strange though...It would be extremely difficult to keep track of all of the deducations without some kind of payroll software which would include paycheck software...
People who mow lawns and stuff like that get payed in cash all the time...Just go with it, maybe demand more? :P Illegal, yes, but only if your employer reports it wrong, but otherwise, it should be fine. If you want, you could just confront him and ask that you get payed in a more recordable manner such as by check or any other way you can think of.
I would not trust this. It sounds like he is tryijng to work "off the books" so he does not have to report it to the IRS. Also how do you know he is putting money into Social Security and otherwise. I would request every week that he gives you a receipt if he insists on paying cash and also detail what he is putting away for you. If he can't or want do this then you need to find another job because it sounds like he is taking advantage of you.
It's legal but it sounds shady I would quit. I bet he'll pad his numbers for more tax breaks for his business.
It is legal to pay in cash - that 's where the phrase "pay envelope" comes from. But there should also be a piece of paper showing your gross pay and the deductions. But whether the net pay is paid by check or cash doesn't matter under the law.
However, if your employer says he'll "put you down for a low amount," then it sounds like falsification to me. Yes, it would reduce your taxes, because you would rely on a low earnings number as shown on your W-2. But guess what? It is also your responsibility to declare all your income, whether it's reflected on a W-2 or not!
He's doing this because under-reporting your income lowers his employment taxes. And it makes it easier for him to conceal some of his own income. It's wrong.
Now to your question. You can ask him for an accurate earnings statement that shows your gross pay, all deductions, and your net pay. This should be done with each pay day. Ideally it would also have year to date numbers, which would be a running total of everything. Or you could just ignore it.
Some employers will do the right thing because you asked them to. Some will fire you for being a "troublemaker." In which case you would want to report him to the IRS.
The fact that he says he will alter the amount at the end of the year is a violation of IRS code and you should have a record of all deductions from your pay every time you are paid. You are responsible to pay federal income tax, half of Social Security and any state and local taxes. If he reports this income on a form 1099 at the end of the year you will have to pay not only your half of SS but his half also and you will have to pay a penalty for not paying estimated quarterly payments to the IRS plus interest on what you owed when estimate was due. Also, if you do not have a statement of what he is withholding from your pay you probably would lose all that. The fact that he said he would alter how much he paid you at the end of the year and he did and you filed your return using this altered amount could make you a co-conspirator to tax fraud.
If you worked there over a few months you could call the IRS and see if any withholding is being credited to your account and if not decide what you want to do from there.
I sure hope, for your sake , you are keeping records of what he is withholding from your pay
I am not going to repeat what others have said.
But if he is underreporting to IRS, then he is underreporting to Social Sec. as well. Which will hurt you when you retire. Also he is possibly not paying unemployment taxes or workmans comp. Workmans comp is big, if you get injured and he goes bankrupt you will be screwed.
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