Envelope wages

Often used in the context of under-declared employment, an envelope wage is a cash-in-hand wage paid by a formal employer to a formal employee in addition to their official declared salary, to reduce their tax and social security payments and therefore labour costs. It arises from an agreement between the employer and employee, and additional conditions may be attached to its payment, which are not in the formal written contract or terms of employment.

[Williams, C.C. and Horodnic, I.A. (2017) Evaluating the illegal employer practice of under-reporting employees’ salaries”, British Journal of Industrial Relations, Vol. 55, No. 1, pp. 83-111]