Paying Employees in Cryptocurrency

Paying Employees in Cryptocurrency

An increasing number of businesses are offering their employees the chance to get paid in bitcoin, either to hold as an investment or due to its benefits as a borderless means of transfer. If you want to start paying with bitcoin, here’s what you need to know.

Paying directly with Bitcoin

There’s no reason you can’t simply make direct Bitcoin transactions manually, using a regular desktop or web wallet, or an exchange account. This is an easy way to get started with paying with bitcoin, but you’ll need to check the amounts carefully and ensure the recipient’s address is correct. If you want to set up something more sophisticated, it’s a good idea to start using bitcoin payroll software like PaymentX.

How to create and send crypto invoices

PaymentX allows your employees to create dollar-denominated invoices that can be paid in crypto, with the platform automatically calculating the correct amount using the exchange rate at the point the transaction is made.

Creating and sending crypto invoices is easy. Once users have created an account and entered their personal information, they can open a new invoice and fill in all the details that would normally be required by payroll software – an invoice number, a list of tasks, and amount charged (in dollars) for each one. They can select their preferred currency and crypto address for payment, and the required date for settlement.

The finished invoices are submitted to the designated email address. At this point, it is straightforward for the recipient (such as an Accounting or HR department) to process them. Using funds held on their account, invoices can be settled in one click. Because conversion rates are calculated automatically, there is no extra overhead of time involved for the accounting staff, and human error is reduced to a minimum.

The recipient will receive the cryptocurrency, and can choose whether to hold it as crypto, or convert it to fiat, as they wish.

Tax treatment of cryptocurrencies

Depending on jurisdiction, paying with and getting paid in bitcoin may have different tax implications.

In many major jurisdictions, cryptocurrencies are treated for tax purposes as just that – currencies – meaning they are viewed the same as any other currency such as USD, EUR, GBP, etc. However, before you start paying employees with bitcoin, it is always worth checking to make sure there are no unforeseen consequences or complications to your tax and accounting processes.

Features and benefits

PaymentX otherwise takes all of the hassle out of invoicing and paying in bitcoin. Automatic calculation saves a huge amount of time, as does the ability to settle multiple invoices with one click. It’s also possible to set up recurring payments, which is ideal for employees who want to take part or all of their monthly salary in cryptocurrency. Email notifications ensure that invoice submission and settlement are not missed.

Together, these features make paying with bitcoin as simple – and far more flexible – than running a conventional payroll system, especially when interacting with employees overseas.