Working cash-in-hand in Ireland

When you are looking for a job, some people may ask you to work “cash in hand” or “under the table”.

This means that they will pay you in cash, not through a bank account.   Also, they won't deduct any tax, and usually will not give you a pay-slip, either.

At first, this sounds great:   you know exactly what you will earn, and everyone wants to pay less tax!

There are times when it’s the only practical way to work - for example, if you are using your own lawnmower to cut lawns, you only see each “employer” once a month for half an hour, they can ring up and cancel at any time, and you can do the work when you're ready (within reason) . But most jobs aren’t like this.

But there are some reasons why it's not-so-great too:   Before you agree to work “cash in hand”, you should understand what it means for your tax, welfare and employment rights.

Problems with working cash-in-hand

It’s against the law

The law in Ireland says that anyone who employs a person must:
  • Deduct tax from their wages and send this to the tax-department (who are called “Revenue”), and
  • Pay employer’s tax (called Employer-PRSI).

There are times when an employer doesn’t need to do this is if the job doesn’t meet Revenue’s “employee test”.  You can read about the "is this person an employee" test here, short, if you are working:
  • in someone's building, 
  • at times they say, 
  • using their equipment 
  • being supervised by them 
then you are most likely are an employee, and your employer needs to be looking after the tax.

If you are working for someone and they don’t deduct tax and pay PRSI, then they are breaking the law. If Revenue find out about it, then they can be fined.

The law also says that you need to tell the Revenue any money you earn, and to pay the tax you owe on this. Most people don’t need to do anything about this, because their employers do it for them.

But if you work for an employer who isn’t sending your tax-deductions to Revenue, then you are responsible for telling them (this is called "declaring your income") and paying the tax. If you don’t do this, then you are breaking the law. And if Revenue find out about it later, then they may charge you a fine.

You won’t get social welfare

The second big problem with working under the table is that it can stop you being eligible to get social welfare.

The tax that is paid by workers and employers in Ireland includes Pay Related Social Insurance (PRSI).

For each week that you earn money and pay tax, you also earn one “PRSI Credit”.   (Some people call these “stamps”).

If you have enough PRSI-Credits, then:
  • If you lose your job, you can get Jobseekers Benefit
  • If you get sick, you can get Illness Benefit
  • If you have a baby, you can get Maternity Benefit
  • When you are old, you can get State Pension
  • and some other social-welfare benefits too
If any of these things happen, and you don't have enough PRSI credits, then you don't automatically get any welfare benefit.    You might be able to get some other social-welfare allowances, but they are a lot harder to get. And if your employer won’t give you a letter saying you were working there - so you won’t be able to prove you lost your job, which means you may not even get Jobseekers Allowance.

It may be impossible to get your other employment rights

Ireland has laws about your rights at work. These are about things like minimum wage, hours of work, being paid for the hours you work, jury duty, maternity leave, health and safety, equality, etc.

If your employer is breaking these laws, then you can ask the government to make them treat you correctly.

But if you are working cash-in-hand, then your employer can say that you don’t work for them at all - and you can’t prove that you do.

In the same way, if you have an accident at work and your employer says that it’s your fault because you were trespassing - you can’t prove that you were supposed to be there.

What do do

If someone asks you to work cash-in-hand or under-the-table, then you need to weigh up the costs and benefits, and decide if it’s worth taking the risk.

In Ireland, people who earn under approx €18,000 in a year don’t have to pay very much tax anyway, - so some decide that for the amount of tax they save, it's just not worth the risk.

If you do decide to take do it for short time, then make sure you don’t stay in the job for long: The longer you stay there, the more time you are not earning “stamps” and so the more chance you will have a big problem if company eventually closes - or even several years later.

And, of course, either way you should make sure that you are declaring your income to Revenue, and paying the right amount of tax.

Note:  the Staff-Wanted network are not lawyers or accountants.  This is very simple description of the issues   If you need legal or tax advice, please consult a professional.

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