Paid Under the Table in Canada: What It Means and Your Rights

Getting paid “under the table” — usually in cash with no record — is common in some workplaces. But it creates real legal risks for both workers and employers in Canada. If you’re working under the table or your employer is paying you this way, it’s important to understand how it affects your rights, your taxes, and your ability to claim things like EI, severance pay, and Employment Standards protections.

This guide explains what “under the table” pay actually means, whether it’s illegal, and what to do if it has happened to you.

What Does “Paid Under the Table” Mean?

“Paid under the table” means your employer is giving you cash or unreported wages without recording your hours, earnings, taxes, or deductions. It may also be called:

• Working under the table
• Cash jobs
• Off the books

In most cases, employers use it to avoid paying taxes, CPP/EI contributions, vacation pay, and minimum wage requirements.

Is It Illegal to Work Under the Table in Canada?

Yes — being paid under the table is illegal for employers. They are required by law to:

• Report your wages
• Deduct CPP, EI, and taxes
• Provide vacation pay
• Keep accurate payroll records

Employees who knowingly participate may also face consequences with the CRA, but the far bigger legal risk falls on the employer.

If You Were Paid Under the Table, You Still Have Rights

Even if your employer failed to report your wages, you still keep your legal protections. That includes:

• Minimum wage in Canada
• Overtime pay
• Public holiday pay
• Vacation pay
• Human rights protections
• Severance pay and termination pay (if you’re fired)
• Protection from retaliation

Federal and provincial laws do not remove your rights just because your employer broke the rules.

Can You Claim Severance Pay If You Were Paid Under the Table?

Often, yes. Severance and termination pay are calculated based on your actual earnings, not what your employer reported.

If you were paid cash or partially off the books, you may be owed:

• Termination pay
• Severance pay
• Unpaid overtime, vacation, or holiday pay
• Retroactive CPP/EI contributions (the employer must pay their share)

Our lawyers at Samfiru Tumarkin LLP often see employers try to deny severance by claiming “you weren’t an employee” — but courts don’t accept that argument if you were clearly working for them.

Can You Apply for EI After Being Paid Under the Table?

This can be challenging. Since EI requires recorded insurable hours, you may initially be denied. But your employer can be forced to:

• Issue a corrected Record of Employment (ROE)
• Pay back missing CPP/EI contributions
• Provide evidence of your hours and pay

If you’re denied EI after being paid under the table, get legal advice immediately — we help employees challenge EI issues all the time.

Signs You’re Being Paid Under the Table

Your employer may be doing this if they:

• Pay you in cash only
• Don’t issue pay stubs
• Don’t deduct CPP, EI, or taxes
• Ask you to use false hours or fake job titles
• Refuse to issue an ROE
• Call you an “independent contractor” but treat you like an employee

If any of this sounds familiar, you are likely classified incorrectly or being underpaid.

Can You Be Penalized for Working Under the Table?

Employees rarely face penalties unless they intentionally commit tax fraud. The CRA focuses enforcement on employers — not workers — because employers are the ones responsible for:

• Payroll deductions
• Record-keeping
• Reporting wages
• Paying taxes and contributions

If you were unaware or simply needed income, you will almost never face consequences for reporting what happened later.

Why Employers Pay Workers Under the Table

Common reasons include:

• Avoiding taxes and payroll costs
• Avoiding ESA obligations (overtime, vacation, holiday pay)
• Hiding unsafe or illegal working conditions
• Trying to avoid liability for severance or termination pay

These practices are illegal in every province, including Ontario, Alberta, and BC.

What to Do If You Were Paid Under the Table

Here are simple steps to protect yourself:

1. Gather proof of your work: This includes text messages, emails, timesheets, photos or videos of work, bank deposits, witnesses
2. Do not confront your employer alone. Employers often fire workers the moment these issues come up.
3. Speak to an employment lawyer. You may be owed significant compensation — especially if you were fired, refused an ROE, or got paid below the legal minimum.

Key Takeaway

Getting paid under the table doesn’t erase your rights. You are still protected by employment standards laws, and you may be owed unpaid wages, severance, and other compensation. Your employer is responsible for following the law — not you.

Speak to an Employment Lawyer About Under-the-Table Pay

If you were paid cash, denied an ROE, or fired after asking about proper pay, an employment lawyer in Canada for Ontario, Alberta, and BC can explain your options and help secure the compensation you’re owed.

Our team at Samfiru Tumarkin LLP has helped tens of thousands of non-unionized employees across Canada get what they’re legally entitled to — even when employers paid them under the table.

📞 Call 1-855-821-5900 or use our consultation form today.