Until a few years ago, Bitcoin and other cryptocurrencies were considered preferred virtual currencies by criminals who exploited the high levels of privacy offered by these systems to make it difficult to trace any transaction, but today they seem to have become a method of payment and investment also increasingly used to pay wages, as reported by Cryptonomist.ch.
If the salary comes in Bitcoin
It didn’t take long for businesses to become interested in this new medium evaluating the possibility of using crypto to pay the salary of its employees.
Already in 2018 the Japanese company GMO Internet Group has allowed 4000 of its employees to receive no more than 100,000 yen in Bitcoin remuneration, corresponding to approximately 750 uero.
How to pay in Bitcoin
In 2021 there are now many companies working in the sector of cryptography and blockchain technology and that offer this kind of service. In the world of work, freelancers are also emerging platforms, such as Ethlance and Bitwage, which allow you to work and get paid using crypto currency. Regulations around the world are adjusting to this technological change and the continuing growth in popularity of digital assets.
There are several solutions for companies that decide to follow the trail of innovation and offer its employees payment solutions in cryptocurrencies, but we often only talk about partial wages not full wages and requests from the employee himself.
Pros and cons of Bitcoin wages
A Bitcoin salary is very different from a fiat salary. Several advantages and disadvantages can be identified in relation to the use of crypto as part of a worker’s salary.
As payment via crypto is not yet widespread in all restaurants, shops or other types of businesses, request a whole salary in bitcoin it would be difficult to manage especially in purchases or in paying taxes, even if the famous family of Didi Tahiti has been doing it for years by touring all over the world. For example, it is less and less difficult to spend your crypto graces to debit cards such as Eidoo. They could immediately be converted into fiat or stablecoin also in order not to be subject to the volatility that for example has Bitcoin.
Taxes for cryptocurrencies
Another piece is regulation. It must be remembered that each country has its own regulation of the labor market and taxes that apply to income.
In Spain where cryptocurrencies are not legal tender and cannot be recognized as money, the salary paid through the use of this means of payment must follow some rules:
- It cannot be granted for an amount exceeding 30% of the employee’s total salary;
- There must necessarily be a prior agreement between the employer and the employee;
- The worker must be registered with the Social Security and must pay the IRPEF withholdings, referring to the legislation that regulates them stock options: therefore, it is considered that the tax base is the market price at the moment in which the salary is paid.
In the United Kingdom instead from the fiscal point of view, the accounting office of the companies that want to adopt this method, processes everything in British pounds, then converts the required amount of pounds in BTC to make salary payments.
The tax part depends on the country and there aren’t many places where you can get an official salary in BTC, like in New Zealand or El Salvador where some cryptocurrencies are legal tender.
In Rovereto we have an original example of a made in Italy company that accepts payments from customers and pays employees with Bitcoin. The “Mani al cielo” bar has been paying some suppliers in bitcoins for about three years and giving employees the opportunity to collect a percentage, of their choice, of their salary. Bitcoin.
The volatility of cryptocurrencies
Last and perhaps most important reason for the distrust of cryptocurrencies is their volatility. Employees do not like to receive $ 100 in compensation for their work and watch the sum drop to $ 80 due to a collapse in the value of the currency.
Unlike other markets that have greater predictability, the cryptocurrency market still seems to be unpredictable and for this reason many experts propose the use of stablecoin for wages.
Anchored to another financial asset, stablecoins do not suffer from the problem of volatility: many workers prefer to receive part of their salary in Tether (USDT) both because they will not see the value decrease and because a USDT transaction is faster than a common bank transfer.
This type of remuneration can be an advantage for those companies that lack cash at any given time but, if it becomes popular, it could start to develop in countries with a highly volatile local fiat currency, or among companies with cross-border salaries that do part of the so-called gig economy.