Business Expenses?

Question

I am a small business owner all my transactions are cash, and I will now have to start showing my business is making money because I'm about to lease a truck.

MY QUESTION IS:

I need to write a company cheque for my workers now, instead of paying them cash

What business expense would this be categorized under since my workers are not on my payroll?

I am located in ONTARIO CANADA.

Answer 1

My comments here are based on the assumption that the rules in Canada are roughly comparable to those in the US.

You could be making a huge mistake by paying workers in cash. If you are caught, you may liable for employer taxes that you didn't pay, and for employee withholdings that you didn't collect and remit.

As for what expense, that is "Payroll expense."

Good luck in your business.

Answer 2

contract labor is the term used in usa.  Check with your country's Department of Labor or Department of Revenue to see if you are correctly treating your workers as Contract Laborers.  Regardless of how you pay them, cash or check, they are either:  employees or contract laborors.

Answer 3

To get a vehicle lease for your business, you will probably have to provide a proper set of accounts for at least the past year, or show some other form of collateral.

You probably also need some sort of business license, and there will be tax implications too. Without one you may be breaking the law, so be careful about operating this way. I don't know Canadian law, but employing casual labor such as drivers and paying them cash is likely to come under some sort of regulation too.