Paying a tradesperson in cash: what you give up

Short answer

Paying cash is legal. Paying cash with no invoice is where the problem starts: without a record you have no proof of what was agreed, no evidence for an insurance claim, and a much harder time enforcing consumer guarantees that you still legally hold. The discount is usually smaller than the risk it transfers to you.

The offer is familiar and the arithmetic looks appealing. What is being priced in that discount is rarely explained, so here it is.

What the paperwork actually does for you

  • Proves the work happened, who did it, and what was agreed — the foundation of any later claim.
  • Establishes who you contracted with, which decides who owes you a remedy.
  • Supports an insurance claim. Insurers ask for evidence of who did the work, and unevidenced work can complicate or defeat a claim if it later causes damage.
  • Supports the sale of your home, where a buyer or their conveyancer asks whether work was done properly and by whom.
  • Starts the clock on any workmanship warranty in a way you can later prove.

Where it gets more serious than an invoice

For licensed work — electrical, plumbing, gas — a compliance or safety certificate is a legal requirement in most jurisdictions, not paperwork you can trade away. Work done without one can affect your insurance, and it is a problem you inherit rather than one that stays with the tradesperson.

A tradesperson who will only work for cash and will not issue any invoice is telling you something about how they run their business. It is not a judgement about their skill; it is information about what recourse you will have.

The reasonable middle

  1. Paying by cash is fine. Insist on an invoice regardless — an invoice records the transaction whatever form the payment took.
  2. The invoice should name the entity, its ABN, the work done and the amount.
  3. For licensed work, ask for the compliance certificate at the same time, not later.
  4. Keep the invoice with your property records rather than in a drawer. It is worth the most at the moment you had forgotten it existed.

Of the 36,230 businesses in this directory, 9.8% publish an ABN a customer can confirm. Asking for one on an invoice is not an accusation — it is the minimum that makes the document useful.

Common questions

Is it illegal to pay a tradesperson in cash?
No. Cash is legal tender and paying with it is perfectly lawful. What can be unlawful is a business failing to declare that income, which is their obligation rather than yours — but a transaction with no record at all leaves you without evidence if anything goes wrong.
Do I still have consumer rights if I paid cash?
Yes. Consumer guarantees apply to services supplied to consumers regardless of payment method, and cannot be contracted out of. The difficulty is entirely evidentiary: proving what was agreed, what was paid and who did it becomes much harder without a document.
What should a proper invoice show?
The business name and ABN, the date, a description of the work, the amount, and GST if it is registered. For licensed work it should be accompanied by the relevant compliance or safety certificate.

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