Paying Commission in Cash

[Raene]

Hi there

I have another question that has stumped me completely. I hope someone here can provide some insight as to the best way forward.

One of my clients has been paying someone commission cash for work he has brought in. This individual is employed full time by another company and would get fired if they found out that he was working for himself on the side.

My client has to draw cash to pay him so that there is no record of the income and he refuses to sign for the cash.

It has reached a point where my client is not happy with the situation but at the same time doesn't want to lose his business. How do we proceed with this middle man without it causing the company problems? Are there any legal implications that my client needs to consider?

Is my client by law not required to tax him on the commission earned? The commission varies from 2 - 15k per month.

Please help. I would like to at least guide my client into the right direction.

Regards
Raene

[Dave A]

I suggest your client should tell this source either produce an invoice or your client will issue an IT3a.

[Raene]

Yeah, that is what I said. Client however insists there must be another way.

[Dave A]

Call it a donation and pay it out of after-tax profits?

Every decision comes with a price.