Salary in cryptocurrency
Stories that bitcoin is difficult to withdraw and have nothing to spend have long been out of date. Today, digital coins have become a common payment instrument, and people of different professions around the world receive rewards in cryptocurrency for their work.
How do different countries relate to salaries in cryptocurrency?
In the legislation of each country, certain requirements are prescribed for the minimum wage and the forms of its payment. For example:
- in the United States, the Fair Labor Standards Act states that benefits must be paid to employees in cash or by check, although other forms of payment can be negotiated if desired. Employers can pay part of the amount to employees in cash or checks, and part in cryptocurrency. However, some states have different rules, and wages in them can only be represented in US currency;
In countries that are more loyal to the digital industry, not everything is simple with payments in cryptocurrency either.
- in Estonia and Lithuania, you cannot give away the full amount of wages in digital coins. Only part of the funds – above the established minimum – can be paid in an alternative form. But in cryptocurrencies, premiums of any size can be given. These countries also have a special approach to the taxation of altcoins. In Lithuania, money received in bitcoins or other coins is considered working income and is taxed in the same way as a regular salary. There is no income tax in Estonia, but there is a social tax and a profit distribution tax, which includes cryptocurrency.
Which employer is ready to pay salaries in cryptocurrency?
Those companies that are not afraid of high volatility and problems with regulators can use digital coins to get rid of high fees for remittances and simplify the reward system for freelancers and remote workers.
Basically, companies that work in the digital industry and receive most of their income in bitcoins or altcoins are switching to cryptocurrencies, but there are exceptions.
How salaries are calculated and what are the risks
Salary is calculated based on the price of the cryptocurrency for a predetermined date and time. Simplifying the math: if a cryptocurrency costs ten thousand dollars, and an employee wants to transfer a thousand to cryptocurrency, then he will receive 0.1.
Those employees who have agreed in advance to sell the cryptocurrency immediately after the accrual will receive its value in regular currency. But if an employee wants to save bitcoins, then over time he can benefit from the growth of the rate.
Employees who keep cryptocurrency with them – whether for a day, a month, or longer – can lose money. It all depends on changes in rate: a thousand dollars can turn into five thousand, or maybe nothing.
That is why some experts believe that paying salaries in cryptocurrency is akin to gambling.
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