Until recently, undeclared work was understood as largely the result of tax evasion by employers and workers. However, this viewpoint fails to do justice to the complexity of the phenomenon. The category of undeclared work covers several distinct types of employment relation which arise from different motives and strategies of firms, workers and contractors, and their interplay. There is no uniform logic of development. This article introduces a new typology of undeclared work and shows how the development of the different types of undeclared work can be explained by the ways in which they are embedded in a variety of institutional, cultural and socio-structural contexts.