In the cryptocurrency industry, it is normal to get paid with digital currency. However, those in other industries have since taken notice of the benefits using digital currency has. Some companies have since begun to facilitate crypto payments directly to their employees, while others have found the advantage of using peer-to-peer settlements.
Making payments in bitcoin
Paying an employer or contractor in bitcoin involves two slightly different processes. Below we have outlined the major considerations for each.
Paying contractors with bitcoin
One option for payments is to pay employees directly, wallet to wallet. Bitcoin cash is often used for payments since it is fast, safe and relatively inexpensive to facilitate. Since buyers and sellers transact directly, no third party is involved. Therefore, your employees or contractors will need their own wallets to receive the payment. The actual payment process of transferring bitcoin is the simple part. What may require some additional considerations are buyer and seller trust.
Since contractors aren’t full-time employees, they will most likely not have a long history of working with you, nor will they have had an opportunity to prove their trustworthiness. This relationship might make them more inclined to demand payment upfront. Upfront payments pose a risk since the contractor may never complete the work assigned. Even worse, if they do the work and it is not up to your standard, nothing prevents them from delivering subpar work and disappearing. Luckily, there is a way to avoid both potentially problematic scenarios: a bitcoin escrow service.
With a bitcoin escrow service, you and the contractor would both need to agree to have a third party facilitate the transaction. You would then provide the funds to the escrow service provider to hold in safekeeping until the contracting party completes the work to a standard agreeable to both parties.
Benefits of paying employees with bitcoin
On paper paying employees with bitcoin may seem more complex than you are used to. Fortunately, there are several benefits to paying employees in this method. Below are some of the most notable:
You aren’t restricted by borders
More companies have expanded their presence by hiring employees from around the globe. However, hiring employees from a country that is not your own can get complicated when determining payment currency, method, and tax implications. Bitcoin excels in global payments. When compared to wire transfers, bitcoin is nearly instant and is completely transparent. Therefore, the recipient will never have any doubt in their mind that they aren’t getting paid.
You will attract forward-thinking staff
Many of the biggest bitcoin supporters are also decently tech-savvy and forward-thinking. By offering payment options in bitcoin, you will likely attract this very audience to your company. These forward thinkers might have brilliant ideas that will help to revolutionize your own operations and improve your business.
Paying wages in bitcoin
As mentioned earlier, hiring full-time staff is slightly different from paying for a contractor’s work with bitcoin. Employers will do well to consider two key areas; tax and legal implications.
The secondary consideration for paying your employees in cryptocurrency is taxes. Since a central bank or government does not manage cryptocurrencies, they are not considered legal investments. Therefore, employees will need to note the price of bitcoin when employers pay them. They will also need to note the price when they decide to sell their digital currency since the government will tax the appreciation or depreciation as a capital gain or loss depending on the market price.
Under the federal law of your area, you will need to determine whether it is legal to pay your employees in bitcoin or a similar digital currency. In the United States, the Fair Labor Standards Act is the law to reference. Here it states that an employer must pay wages in cash or a similar instrument. Indeed, bitcoin does technically meet these standards, but your state might think otherwise.
The practical process of paying employees wages in bitcoin
Your company can still pay employees in bitcoin by designating a portion of their wage to be transferred to crypto and a portion to remain in fiat. Alternatively, your employee may opt to have the entire amount transferred into crypto after it is issued. Using the conversion method, the employee will take on the risk that the exchange rate the employer may get may not be as favorable as the one they would receive if they transferred the funds themselves.
Volatility is another concern that a new cryptocurrency investor might not yet understand. If the price were to dip following the payment, your employees must recognize this is part of the risk that comes with cryptocurrency, and you, the employer, are not responsible for the lower payment.
Getting paid in bitcoin
Although few companies are paying wages completely in cryptocurrency, many freelance positions are. Freelancing has continued to gain popularity in all areas, with studies suggesting that contractors would make up most of the United States workforce in the next 10 years.
Companies that use cryptocurrency can conduct payments to anyone, anywhere, and with minimal fees. For those looking to get paid in crypto, here are some online platforms you might want to check out.
Bitcoin job boards
Crypto Jobs List: Crypto Jobs List is a platform known for having one of the biggest collections of cryptocurrency and blockchain jobs with over 2100 postings.
Coinality: A great job board for positions in software development, web designing, and content creation. On this platform, job seekers can also post their resumes for companies to scan through. Postings will include a combination of full-time and part-time/one-off positions. That said, the website is less user-friendly than some of its competitors.
Crypto Jobs List: This job board makes it easy to sort through different categories and specialties within your job niche. The user interface allows you to see how many people have viewed and applied for a posting and the salary. Crypto Jobs List also allows users to filter for jobs by remote positions.
Benefits of getting paid in bitcoin
Some major benefits come along with getting paid in bitcoin; among them are:
Earning potential: You might choose to hold onto your digital currency until the next upswing. In some cases, when bitcoin has entered a bull run, it has gone up 30%. If you time the market well, you might make yourself a nice bonus on top of your earnings.
Get paid instantly: Unlike a wire transfer, getting paid in bitcoin is almost instant. It also can be completed from anywhere in the world with the Internet. For those working abroad, this can be a great method of getting paid without worrying about going through a bank.