An envelope salary entails a lot of problems and a disempowered existence.
In this article you will learn what types of salaries exist and which one is better. If you receive incomplete salary or completely hiding your income, you only cheat yourself, what will be the consequences and what to choose will be discussed in detail below.
What salaries are like and why
Everyone seems to know about salaries of different colors. But let's go over it again so that we can talk about it more substantively.
You are officially registered with the corresponding entry in the employment record, and your salary is also formally paid. This means that personal income tax is withheld from it. In addition, the employer fills in all the documents, as w2 form, pays the money to the Pension Fund, Social Security Fund, and Mandatory Medical Insurance Fund. Your relationship with the company is transparent and clear.
You are not on the company payroll. You are paid in an envelope. No one pays any taxes on your behalf. You are officially unemployed. You are always at risk of being penalized for not paying taxes.
You are registered as an employee of a company. You receive part of your salary officially, and taxes are withheld from it. The rest you receive in an envelope.
This scheme is not usually introduced for the comfort of the employee. As a rule, the official part of the income is equal to the living wage in the region, and this allows the organization to fudge the tax authorities successfully. At the same time, if you are registered, you can already be made financially responsible, conclude an employment contract with a ban on disclosure of information, and so on.
What you get by accepting a black paycheck
Often employees are even happy about their non-white salaries: they can avoid paying personal income tax to the state. In fact, it turns out that this benefit is questionable, especially with all the disadvantages.For more information, you can check this article.
With a black paycheck, you are not on the payroll. You have no leverage over your employer in a disputed situation. Accordingly, he may:
• Fire you by simply saying: "Don't come back."
• Not pay your salary for the past month.
• Not give compensation for unused vacation.
• Fine you for anything for your entire paycheck.
Prove your case in court will not be easy because there are no documents. And if you do manage to confirm the fact of work, it can come back to you.
So you have to choose what you want more: to call your employer to account or not to fall under the radar of the tax authorities.
With a gray salary, you won't get far from this scheme. You will be fired as you should be, with a record in your employment record. But they can pay you according to your official income, i.e., the minimum wage.
No sick leave
If you fall ill with something quick and relatively harmless, you may be allowed to work from home with pay. But an employee who is seriously sick permanently is unlikely to be needed by an organization that doesn't comply with the law and you may risk not getting paid anything. A gray paycheck will result in a nano paycheck.
These are the advantages and disadvantages of being paid in an envelope. That is why it is very important to pay taxes and receive a registered salary. Of course, it is good when all the laws are observed, the salary is accrued officially, all taxes are paid from it, and the employee feels socially protected. As a result, you will feel the protection of the state, receive pension payments and you will be confident in the reliability of this work.