10 Ways to Show Proof of Income if Paid in Cash

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Proof of income is a requirement for many important things, such as a car loan or a rental application. But if you don’t have a traditional job where you receive bi-weekly paychecks — if you’re paid in cash — proving your income can be difficult. 

Being paid in cash isn’t necessarily a bad thing, but it does come with a few disadvantages. 

Taxes are not accounted for, meaning that you will need to set aside a sum of money to pay at the end of the tax year that is owed to the government. 

Secondly, it’s much harder to track. There is no “paper trail” digitally or physically when being paid in cash unless you create and maintain one. 

So how can you show proof of income if you're paid in cash? 

Don’t worry; there are simple strategies you can utilize to show proof of income. 

Next, we’ll take a look at 10 ways to show proof of income if paid in cash. 

#1: Create a Paystub

The first way to show proof of income if paid in cash is to create your own paystub. 

There are templates available online that can be printed off and filled out each time you are paid. 

In the paystub, you will need to include:

• client name
• date 
• services done
• the amount paid to you

After filling them out, store them in a safe place for future reference and develop a reliable system for documenting as you go. 

It may be time-consuming work on the front end, but come tax time, you’ll be thankful you put forth the effort. 

#2: Keep an Updated Spreadsheet

Rather than printing off pay stubs, you may prefer maintaining records digitally. 

There are a few options in that category as well with one being a simple Excel sheet. 

Creating headers indicating the specific information to record makes recording transactions straightforward. 

Using the search function, you can also find a specific payment much faster than you would be able to sort through papers. 

If you use a spreadsheet, keep in mind that your computer could crash. Because of this, we recommend keeping printed backups of everything. 

#3: Bookkeeping Software

If you’d prefer to have a template set up for you already rather than creating one from scratch, bookkeeping software is available for the purpose of recording transactions. 

This tool can make things extremely convenient and safe thanks to the online storage options that come with it. 

This software is also often compatible with other programs used for filing taxes, making life easier when that time comes. 

#4: Always Deposit the Payment and Print Bank Records

If you can remember to be diligent about depositing any and all payments into your bank as you receive them, printing out your bank statements can be a great way to automatically record anything you need to. 

It can be one of the simplest ways to show proof of income if paid in cash. 

These bank statements can serve as a makeshift ledger of all payments you are given and make easy work of recording your income. 

#5: Put it in Writing 

Much like the other options, writing down the relevant information on a sheet of paper works too. 

While it will be a bit less formal, if you and the client can collaborate to each sign it and verify it as accurate, it works just as well. 

#6: Create Your Own Receipts

Receipt books are widely available and provide an outline of the vital information to record when making a transaction. 

Though they cost money, they can be a great way to show proof of income if paid in cash. 

Whenever receiving a payment, you can bring the book along to create one and even get a signature from the client as a way to verify it. 

#7: Utilize Your Tax Documents

Though it can be expensive, you may want to consider hiring an accountant to assist with the more advanced tax filing involved with self-employment. 

That being said, your tax documents can serve as proof of income if needed. 

These official documents are verifiable and a great resource if you’re looking to show proof of income when paid in cash. 

#8: Use an App

There are several apps that can help you record your income, such as Freshbooks. 

They are dedicated to making self-employed payment tracking easy. 

With just a few taps, logging transactions are quickly completed.

But with this option, we still recommend having backups in the event the software has a malfunction.

#9: Proof of Income Letter

Also referred to as an employment verification letter, a proof of income letter can certify that you have been paid for services performed. 

A proof of income letter includes all the needed details about the work completed, the client information, and their signature. 

It’s a great option if you’re looking to show proof of income if paid in cash. 

#10: Employment Contract 

If you are working under an employer who pays in cash, requesting an employment contract to use as proof of income is an option for you. 

This document will include the information mentioned previously via other methods and can be notarized to add a layer of legitimacy to it as well. 

The Bottom Line: How to Show Proof of Income if Paid in Cash

Proof of income is important, and thankfully, there are plenty of ways to provide it. 

If you’re looking to show proof of income if paid in cash, utilize one or many of these options so that the next time you apply for housing or car loans, you’ll have the financial track record to receive the best loan possible.