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Can I Pay Employees in Cryptocurrency?

pay employees in crypto

Key Takeaways

1. Cryptocurrency is showing clear signs of moving into the mainstream economy, with major companies now accepting Bitcoin for goods and services, and some businesses opting to pay their employees in cryptocurrency.

2. The pros, cons and practicalities of paying employees in crypto need to be carefully balanced against one another and can vary significantly according to the location and characteristics of your workforce. In some countries, cryptocurrencies are entirely banned, while in others they either cannot be used to pay employees, or are so tightly regulated that they cannot operate.

3. Disadvantages may outweigh advantages for a large globally dispersed workforce without strong tech knowledge and enthusiasm. For workers based in financially conservative countries with restrictive cryptocurrency regulations, paying employees in crypto may be impossible or not financially viable.

4. On the other hand, a company might have a large number of tech-savvy workers who already have their own Bitcoin wallets, and are located in countries where regulations are broadly supportive of cryptocurrency integration. Paying these workers in cryptocurrency could save their company time and money while boosting employee engagement.  

5. Developments and trends around public acceptance and consumer use of Bitcoin and other cryptocurrencies should be watched carefully by business and HR leaders, with current and future opportunities in mind.

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Once the preserve of tech experts and a mysterious digital novelty in the wider world, cryptocurrencies are finally going mainstream. Global companies including Microsoft and Tesla are now accepting Bitcoin as payment for goods and services. The longest established, most valuable and most widely held cryptocurrency, Bitcoin is becoming an accepted form of employee remuneration for some companies. One country, El Salvador has even made Bitcoin into legal tender.

Beneath all the hype and headlines, there are some interesting cryptocurrency trends emerging in the real world. The mainstream acceptance and use of cryptocurrencies, especially Bitcoin, is one to watch, as 20th century-rooted financial and legal systems grapple with accommodating a 21st century tech innovation.

This issue should be of interest to many business leaders, especially those with a heavily tech-linked international workforce or customer base, who are likely to already be comfortable with cryptocurrency concepts and usage.

How to pay employees in crypto?

It is possible for companies to pay their workforce in cryptocurrencies in some cases, in some countries (e.g. UK, USA or El Salvador).

In some other countries, cryptocurrencies are completely banned (e.g. China, Egypt, Qatar) or so tightly restricted that they cannot practically be used or traded and are effectively banned. Even in countries where cryptocurrencies are relatively well-accepted and integrated there may still be restrictions or bans on using them to directly pay employees.

In the USA, regulations can vary between individual states. In some states, employers are obliged to pay the minimum wage in USD, with crypto only usable for remuneration beyond this point. They may also be obliged to get employee written authorization that they wish to receive all or part of their salary in cryptocurrency.

An alternative for employers is to partner with a third party service provider who can convert employee payments into Bitcoin and disburse these to the workforce.

Where it is legally and logistically feasible to pay employees in crypto, there are some advantages to this option. Companies might also opt to pay their staff partly in crypto and partly in cash (e.g. bonuses in Bitcoin and regular salary in cash).

If you are thinking about paying employees wholly or partly in Bitcoin or another cryptocurrency, you should scope and plan carefully. You will need to ensure that you remain compliant with local laws and tax regimes, and that your workers are still able to access their payment.

The regulation of Bitcoin and other cryptocurrencies is usually complex and can be fast-changing, with significant variation in approach across different countries around the world. Paying workers in cryptocurrency may be more desirable and realistic in some countries than others.   

What are the benefits to pay employees in crypto?

There are several potential advantages to paying your employees in cryptocurrency, including:

  • Speed
  • Cryptocurrency transactions are realized and settled almost instantly. Depending on the locations of your staff, payroll and central offices, equivalent standard banking transactions could take days or weeks to process. 
  • Independence
  • Bitcoin and other cryptocurrencies run on decentralized peer-to-peer systems that aren’t reliant on any intermediary bank or other agency. Payments go directly to the individual being paid, without the involvement of financial institutions or governments. This may have positive implications around speed and reduced bureaucracy. With these advantages, crypto payments may one day become the obvious default method for paying globally-dispersed remote employees
  • Workforce appeal
  • Being paid in Bitcoin or similar currencies could be a draw to workers who already use and understand crypto, as well as those with libertarian leanings who prefer to minimize their reliance on state or other authorities. The option to be paid in cryptocurrencies could give your business an edge in recruitment and retention compared to competitors, especially if you pay independent contractors or freelancers in computing and related high-tech fields.   
  • Tax efficiency
  • Depending on how crypto is taxed in your countries of operation, receiving all or part of salary in cryptocurrency could be more tax efficient for some workers.
  • For example, in the USA Bitcoin is taxed as property. This means that Capital Gains Tax (CGT) is applied on sale or use of any cryptocurrency which has increased in value since acquired. As CGT may be lower than the higher income tax bracket, some higher earners may prefer to receive all or part of their salary in crypto rather than cash.
  • Investment potential
  • Far more than cash payments in most countries, cryptocurrencies have the potential to fluctuate in value. This means that if the value of their cryptocurrency appreciates, employees may be paid far more than they would have received in cash terms. (NB Depreciation is also possible.)

What are the risks or disadvantages if I pay employees in crypto?

The risks and disadvantages of paying cryptocurrency to your staff are considerable and would need to be managed and mitigated. For example:

  • Volatility
  • In the same way that cryptocurrencies have the potential to rise suddenly and rapidly in value, they can also fall, leaving payments to employees quickly worth less than they might have expected. If crypto is used for base salary payments, this could leave staff seriously underfunded without warning. Using cryptocurrencies only for bonuses or part-payment could reduce this risk.  
  • Reputation and acceptance
  • The decentralization and lack of government oversight around cryptocurrencies makes them very attractive to financial scammers, money launderers and other criminals. This association then gives cryptocurrencies themselves a poor reputation and risk profile, which makes both businesses and consumers wary of the cryptocurrencies themselves, and less likely to accept them.
  • Compliance
  • To pay employees in cryptocurrency, you must first check that this complies with the law in the country you operate in. Law around cryptocurrencies and their use varies widely, as does the terminology used to describe or define them (e.g. “digital currencies”, “payment tokens” and “virtual assets” might all refer to the same thing in different places). This inconsistency in rules and terminology can be a serious barrier to setting up global cryptocurrency payroll services, and ensuring that wage or salary payments comply with local legal and tax requirements.
  • This could leave businesses open to fines or expensive legal cases if they make miscalculations in gross vs net pay and taxes owed. Ensuring tax compliance, running crypto payroll and issuing crypto payslips might become too complex for paying employees in crypto to be financially viable. Employees themselves may find themselves with obligations to monitor, report and pay tax on the realization of any profit from their crypto-assets.
  • Fragmented and inconsistent global economic integration
  • The lack of integration of cryptocurrencies with established banking and finance systems is a major  logistical challenge, including for paying staff in crypto. Most banks and major companies don’t yet recognize cryptocurrencies and offer no means to tie Bitcoin or other payments to legal flows of money for goods or services. In some countries, cryptocurrencies definitely fall outside the criteria to be considered as real money or legal tender.
  • While workers may be able to purchase an array of Microsoft products, or an electric car from Tesla, they will not be able to transfer their cryptocurrency holdings into their local bank accounts, pay off their credit card bill, or put down a deposit on an apartment. There are indications that this is likely to change over time but the process could be slow.


There is no doubt that cryptocurrency has made a significant impact on the global financial space, including in the payroll of many companies (especially in the United States). Still, in some countries (such as China) the use of cryptocurrency is strictly prohibited. 

Horizons has experience with hiring and paying employees in more than 180 countries around the world. Much of the time, employees prefer to be paid in their local currency. If you’re considering hiring internationally, get in touch today to discuss your company’s needs.

Frequently asked questions

It may be legal in some countries to pay employees with cryptocurrency (e.g. El Salvador) but is banned in others (e.g. China).

Companies should explore the specific legal position for their countries of operation in detail. Even where cryptocurrencies themselves are legal, not all countries will allow them to be considered as a wage or salary. The decentralization and lack of official oversight in cryptocurrencies could also make it hard for an employer to demonstrate full tax and legal compliance.

This question should be carefully examined by local legal and tax experts. The answer varies according to individual tax regimes and cryptocurrency regulations. e.g. In the UK, tax is due on all earnings – money, assets, benefits or anything with financial value. Cryptocurrencies meet these criteria and tax must be calculated and paid according to value at time of payment. In the USA, the IRS taxes Bitcoin as property.