Cryptocurrency is gaining popularity each day, and while it is yet to gain mainstream adoption, a lot of businesses accept it as a medium of payment. while it may seem that only crypto-related organizations offer their workers payments in crypto, other workers may likely be interested in the payment option. However, questions of its legality, acceptability, tax implication and risks involved are questions any employee or employer seeking to receive their salary or wages in crypto.
Receiving cryptocurrency as your salary does have its benefits. Workers get to cut done on transfer and conversion fees. Equally, it is an easy payment method for those hiring remote workers as payments can be made easily across borders. It also helps cut down on transfer fees which may be as high as 7%. Also, leveraging on blockchain passed payment protocol will also get the added benefit of utilizing smart contracts. This will enable easy payment of fees according to a pre-determined agreement.
It isn’t a new phenomenon for workers to receive their salary in cryptocurrency. SC5, a Danish company providing digital services, started paying its employees in cryptocurrency since March 2013. Also, Coinbase paid all six of its employees entirely in cryptocurrency in 2013. Bitwage, a company focused on offering payroll and international wage payments solutions equally started paying its workers in crypto since 2013. Last year, GMO, the Japan internet giant announced that its workers can now receive their salary in bitcoin. Also, social media company Spot.IM made a proposal to the Israeli Tax Authority to enable its employees to receive their pay in bitcoin. Workers could receive their payment in crypto or fiat or split it 50% between both.
While it will make a great idea to receive salary payment there are other factors to consider. Cryptocurrency enjoys considerable regulation in countries such as Australia, Malta, Canada, Switzerland, Japan, Singapore and the U.S. However, this isn’t so in some other countries such as Morrocco, India, and China amongst others. It is important also that employers take into consideration the tax implications of paying salaries in cryptocurrency. For a country such as Switzerland, cryptocurrency is an accepted form of payment and subjected to taxable income.
However, despite the attraction cryptocurrency might present to employees seeking alternative pay, most companies do not offer this option. Some companies do not offer payment in crypto as an option because they would like to avoid taxation issues. Cryptocurrency comes with a different approach toward taxation. Employers who also want to integrate cryptocurrency into their payment system would have to seek advice from accountants and their lawyers to know what is obtainable. While cryptocurrency is still moving toward gaining mainstream adoption it would be nice to see more employees choose the option of receiving their salary in cryptos.
Would you like to receive your salary in cryptocurrency? Share your thoughts with us in the comment section below. We will love to hear from you.