“Rollin’ in the Dough” – Is it legal to operate a cash only business in Australia?

Australia is moving towards being a cashless society and most small businesses (or at least the young cashiers!) expect payment via electronic payment methods, such as Tap ‘n Go, ApplePay or GooglePay.  There are, however, some businesses that have a cash-only payment policy. 

So is it legal to operate a cash only business in Australia?  The short answer is yes!

According to the Reserve Bank of Australia, the provider of the goods or services is “at liberty to set the commercial terms upon which payment will take place before the ‘contract’ for supply of the goods or services is entered into”.

This means that as long as it’s made clear before a product is purchased or a service has started, it’s legal for a business to dictate how it would like to be paid.  An example would be vending machines.  While some have fancy Tap ‘n Go readers, others specify that they’ll only accept gold coins.  They are setting out the terms of the sale, before you agree to purchase the Smiths Chips at C2, or the year old Snickers at D5. 

While there may be many reasons why you might want to run a cash only business, there’s a few things to bear in mind: 

  • many people use digital payment methods and it may adversely impact sales if you only accept cash;
  • You still need to meet your tax obligations.  Tax evasion is illegal.  The ATO receives information from every business in Australia so it’s able to build up a profile of a typical business in any geographical area. Therefore, if a company falls outside the normal range, this may raise red flags.
  • If you also pay your employees in cash, you must ensure that you are paying them on or above the statutory minimum wage and in accordance with any Award or agreement, proper payroll records are kept, as well taxes and superannuation. 
  • Be aware of your legal obligations under anti-money laundering legislation (if relevant), as well as any other relevant regulations.
  • You may need to take extra security measures to protect your assets and employees, such as monitoring cash deposits and developing secure payment policies to ensure that only authorised persons can access the cash register.

In summary, it’s legal to operate a cash only business, provided you keep thorough records, comply with your legal obligations and pay the correct amount of tax and employee payments.

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