This includes failing to report all cash income, paying workers “cash-in-hand” without meeting tax or super obligations, or generally keeping income “off the books”. These behaviours are part of the broader cash or shadow economy the ATO sees as a major compliance risk. (Australian Taxation Office)
What the ATO expects from businesses
Small businesses must:
- Declare all income, including cash receipts, as assessable income on tax returns. (Australian Taxation Office)
- Pay employees correctly, with appropriate withholding tax, super, payslips and employment obligations. (Australian Taxation Office)
- Keep accurate records of cash transactions and lodgement obligations to support tax, GST and reporting requirements. (Australian Taxation Office)
Compliance risks and attention triggers
The ATO flags poor compliance behaviours such as ignoring record-keeping duties, misreporting income, operating outside the system, and poor payroll practices. These behaviours attract compliance attention and may lead to reviews or audits. (Australian Taxation Office)
Practical reminders for businesses
- Reminder to bank and record all cash income to avoid mismatches during lodgement.
- Ensure payroll obligations are met for all workers, even if paid in cash.
- Maintain clear records of sales and payments to withstand scrutiny and avoid penalties for under-reporting.
Being proactive with cash income processes now helps businesses avoid costly compliance actions later. (Australian Taxation Office)
Date published 02 Mar 2026 | Last updated 02 Mar 2026
