Cash in Hand

It refers to the financing package given for some work.  

It indicates the production and sale of goods or services, which are unregistered or hidden from the state, for some reason but such transactions are legal in all respect.  

The reasons to opt for it comprises three conditions – evasion of direct/indirect taxes, and sometimes, it benefits fraud where the officially unemployed people are working, while, claiming unemployment benefits, or avoiding labor legislation, insurance contributions, minimum wage agreements, and other standards at the workplace. 

Use of Cash in hand 

It can be found in many small firms. Some employment opportunities may involve such payments.

For example – if a person leaves the scheme of work in a week of joining, and they are no longer eligible to get the employment benefits because of various factors like medical problems, the payoff received will be in the form of cash in hand.

• The heterogeneity in such payments has not been recognized and is almost hidden from the economic paradigm into social relations and motives, which are almost equivalent to unpaid mutual aid.

• It covers the activities where the means do not comply with the regulations but the ends are legitimate like paying for somebody’s labor as a commodity.

• In the global economy work like home working, cleaning, ironing, plumbing, bathroom installation, electrical repairs, gardening, car repairs or window cleaning jobs can be paid by cash in hand.

• There has been a rise in self-employment in enterprise culture where the employers are subcontracting production and using flexible production management systems.  

• Such methods are widely used to pay for services and goods and also used in terms of interdependent employment activities. 

• Various studies try to understand the magnitude of such transactions on a cross-national basis, regionally, locally or in socio-economic groups. 

• Some such types of transactions are done in an organized manner by employers who undertake individuals or autonomous services’, informally from self-employed people, or from a relative, or friend. 

• Today such payments are not considered low paid or exploitative undertaken by a marginal group of people.

• In the modern economies, organized form of such transactions can be found where informal employees are well paid and have higher skills and have control over their work, also over the relationship with the employer.

Some economists believe that one cannot pay in cash for certain commodities or services.

It is impossible to structure certain market-based models that are completely based on a fixed price and profit-making motivation. 

Studies find people may involve in work not just for money but for other motivations like developing a social network for global social investment funds or as an opportunity for reciprocity.