Cash Wages

DEFINITION of 'Cash Wages'

Cash wages include any kind of compensation that comes in the form of spendable money. Cash wages can include actual cash currency, any kind of check and money orders. This type of compensation excludes stock and stock options, insurance and fringe benefits.


Cash wages are always reported by the recipient as ordinary income. Wage earners must pay taxes out of these wages, regardless of how it is paid out. Employers must withhold payroll taxes and report employee wages. Some workers and employers pay cash wages 'under the table' to try to avoid the payroll taxes, but it is illegal to do so.