I’ve got a unique situation I am not sure how to handle. I have a retired gentleman who recently started working for me part time. We’re talking a day a week or less. He strongly prefers to be paid in cash. I talked to my insurance and they told me he is covered as long as I claim him on the annual audit. Are there any issues with paying him this way? Anything special I need to do tax or accounting wise?
While I agree that I wouldn’t want to jeopardize his pension, that’s also his problem. Why should I take on a massive risk of legal liability because this guy wants to make a few more bucks on top of his pension?
If you get caught paying under the table, you are looking at big fines, getting audited every year, and higher work comp rates for the foreseeable future. It’s all risk and no reward for you.
Then like I said let him go. Don’t give him a surprise at the end of the year.
Pay him from the petty cash jar as a donation as he is a volunteer.