Paying your employees in cash???

Discussion in 'Starting a Lawn Care Business' started by spitfire3416, Feb 6, 2013.

  1. Patriot Services

    Patriot Services LawnSite Fanatic
    Posts: 12,446

    This whole thing is a huge red flag. WC is not retroactive and not all claims are automatically approved. You will have a hard time proving the guy just happened to get hurt on his very first day of work. Once an investigation starts it will all unravel like a cheap shirt. Multiple agencies will get involved, charges will start flying, assetts frozen. If you think any of these employees won't roll on you guess again. It will be a huge life destroying ordeal because you want to save a few bucks.
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  2. Hahaha...I'm cracking up reading this
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  3. spitfire3416

    spitfire3416 LawnSite Senior Member
    Posts: 518

    again, he doesn't really show an additional profit because he is paying his employees with the cash he receives from a select amount of customers. he has 30 or so customers that covers his labor costs. so he is really only showing a profit for 50 lawns. all of his deductions such as mower & truck payments, liability, work comp, truck ins etc counts towards those 50 lawns that are paying him on the books. and he still shows no profit at the end of the year so that way he avoids paying any extra income tax.
     
  4. GMLC

    GMLC LawnSite Platinum Member
    Posts: 4,353

    No matter how you try to twist it into a good thing its still illegal....
     
  5. jrs.landscaping

    jrs.landscaping LawnSite Silver Member
    from Maine
    Posts: 2,715

    Same here. An employee HAS to be on the books to be covered by WC. Your buddies blowing smoke.......
     
  6. Kelly's Landscaping

    Kelly's Landscaping LawnSite Platinum Member
    Posts: 4,261

    Then he is still screwing himself if he paid them correctly he would get to write off that off of the 50 he is being honest about, and then pocket the 30 he was being dishonest about. And he is also lying about workers comp or your just assuming he has it which he does not. It's is based on workers pay and if they can not verify what you paid then they do not know what to charge thus he couldn't have it since he has no proof of payroll to offer an insurance company.
     
  7. Pietro

    Pietro LawnSite Senior Member
    Posts: 858

    ^True, BUT dont forget, it costs an employeer approx 20% more to pay on the books. All the taxes and such that get taken out of the pay. Hey in our Obama world here is how his buddy gets away with this.....


    John Does lawn service/landscaping. Cash only. John pays his workers all cash, doesnt show more than 10K in profit/sales on the books. Johns worker gets hurt, he just drops him off at the hospital. Guy claims no social security number or Id, and he gets his "Free" healthcare! Oops, its not free, it comes from my check!
     
  8. spitfire3416

    spitfire3416 LawnSite Senior Member
    Posts: 518

    i'm not... the guy said "why would anyone want to lose their biggest deduction of the year and pay income tax on money that they didn't get to keep?"

    i was explaining how he gets around that...
     
  9. wegomow

    wegomow LawnSite Senior Member
    Posts: 389

     
  10. jsslawncare

    jsslawncare LawnSite Bronze Member
    Posts: 1,674

    No, he is saving money by not paying payroll taxes. But I'm no accountant.
     

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