Have you had employees asking to be paid in Bitcoin? Especially in the tech industry, it’s an increasingly common phenomenon. Anyone who’s forward-thinking and interested in cryptocurrency may request that they get paid fully or partly in Bitcoin or another cryptocurrency. It’s a great way to get into the cryptocurrency without having to worry about buying it.
Before you start paying anyone in Bitcoin, there are a few things you should know about the cryptocurrency.
The most important thing you should know about Bitcoin is that the IRS considers Bitcoin to be property, not cash or currency. Under the IRS’s rules, you must pay your employees with currency. Paying them with property means that you have not paid them the minimum wage, no matter what the value of the Bitcoin you have given them is.
The rules are similar in Canada with the CRA, and many countries. Make sure you know your local laws around compensation before offering Bitcoin as payment, or before acquiescing to an employee’s request to be paid in Bitcoin. You don’t want to pay fair value for an employee’s work only to discover that under the law, you haven’t even paid in the minimum wage. The day may come when Bitcoin is accepted as a fair way to pay your employees, but for now, it’s a no-go under most circumstances.
There are two ways that you can legitimately pay your employees using Bitcoin:
1) They Are Not Your Employees
If they’re a contractor rather than employee, that’s another matter entirely. Bitcoin has long positioned itself as a business solution, allowing businesses to save on transaction fees for large sums of money. If you and your contractors come to an agreement to settle your contracts in Bitcoin, you could be in the clear.
2) You Provide It as a Bonus
While you may not be able to provide regular wages as Bitcoin, you may be able to provide it as a performance bonus.
Be careful – if the contract you’ve signed them uses bonuses as a way to compensate for overtime, then Bitcoin may still be a non-starter. However, if it’s provided as a discretionary gift or it’s unrelated to any hours worked, you should be in the clear.
If your contractors or employees are asking about getting paid or receiving bonuses in Bitcoin, it’s time to get started investing in crypto as a business solution. Find a reliable low-free cryptocurrency exchange where you can stock up.
Cryptocurrency exchanges like Bitbuy could help any business looking for a cheap and easy way to pay their employees or contractors. One of the most important qualities you need to look for in a cryptocurrency exchange is a no-fee way to transfer cryptocurrency itself. That’s a rare feature, but one offered by Bitbuy.
Paying contractors or rewarding bonuses in Bitcoin is a forward-thinking business solution. Talk to the people who work for you about this bold move before making the switch or offer as it a way to compensate those who request it.