Handling the complexities of crypto accounting can be challenging. If you have invoices to pay and want to use crypto to streamline the process but are unsure where to start or how to ensure accuracy, this article is for you. Learn how adopting crypto payroll can improve your accounting processes and make paying invoices with crypto easier.

Looking to simplify your accounting processes and pay invoices through crypto without any issues? Acctual’s crypto accounting software might just be the solution you need.

Table of Contents

• What Is Crypto Payroll?

• Advantages Of Crypto Payroll

• Disadvantages Of Crypto Payroll

• Is It Legal To Pay Wages In Crypto?

• How Is Crypto Regulated?

• Tax Implications Of Crypto

• ‍5 Of The Best Crypto Payroll Software

• Choosing The Right Crypto Payroll Partner

• Pay Your Bills In Crypto With Our Crypto Accounting Software Today － Book A Demo To Learn More

What Is Crypto Payroll?

Crypto payroll pays employees with digital assets like Bitcoin or Ethereum rather than traditional fiat currencies like USD or Euros. This form of payment leverages blockchain technology to facilitate transactions securely and efficiently. 

Advantages of Crypto Payroll

• Employers benefit from reduced transaction fees and processing costs. 

• The use of digital assets enables smooth cross-border payments

• Eliminates the need for traditional banking systems.

Incorporating Crypto Payroll

To incorporate crypto payroll into your business, you must:

• Set up a digital wallet for each employee to receive their payments. 

• Proper documentation should be maintained to record these transactions for tax and accounting purposes accurately. 

• Employers must follow all legal and regulatory requirements related to crypto payments.

Growing Popularity

The popularity of crypto payroll is steadily increasing, especially within the tech and blockchain industries. As more businesses adopt digital assets as a form of payment, the demand for tools and services to manage these transactions is also rising.

Advantages Of Crypto Payroll

Attracting talent with crypto payroll

Offering crypto payroll can be attractive to crypto enthusiasts. 

• This is typically young, tech-savvy, and forward-thinking. 

• These traits are valuable, even if your business does not provide crypto or blockchain services. 

• Crypto payroll can benefit employees and workers in regions with limited access to traditional banking services or where the domestic fiat currency is unstable.

Lower operating costs with crypto payroll

Global businesses must pay staff worldwide. When paying salaries in fiat, businesses face the costs of making international transactions, including bank processing fees and currency conversion. Crypto payments take place across blockchains, which carry much lower transaction costs.

Faster payment with crypto payroll

Another drawback of traditional payroll systems is the time it takes to process fiat salaries. This is especially true when paying employees with overseas bank accounts, where the wait can be up to a week from the moment the payment is initiated. 

Crypto payments are much faster and often settle within a matter of hours. Whereas full-time staff typically receive their salary payments monthly, so the speed is not so much an issue, freelance and contractor staff will favor businesses that pay their invoices immediately.

Anti-inflationary benefits of crypto payroll

Whereas fiat salaries depreciate in value against inflation, digital assets have the potential to rise in value. This can boost the real value of an employee’s salary (although the opposite is also true).

Acctual Makes Crypto Transactions Easy

Acctual is crypto accounting software for businesses and freelancers transacting in digital assets. It simplifies accounts payable and receivable, making it easy to pay bills and send invoices in crypto. Our flexible options let you pay in crypto while vendors receive fiat, receive crypto while clients pay in fiat, or receive fiat while clients pay in crypto. We also integrate with your accounting system, saving you time on month-end reconciliation.

Key features:

• Multi-level approvals for bills

• Fiat-to-crypto and crypto-to-fiat payments

• Built-in AML screening

• Crypto invoice links

• Automatic payment notifications

• With our smooth AP/AR process, automated bookkeeping, built-in internal controls, and flexible payment options, you can simplify your financial operations with us.

Book a call with our team today to learn how you can pay bills and send invoices in crypto with our crypto accounting software!

Related Reading

• Blockchain Payment Processing
• Crypto Bookkeeping
• Fiat To Crypto
• Fasb Crypto
• Crypto To Fiat
• Accounting For Cryptocurrency
• Bitcoin Merchant Account
• Get Paid In Crypto
• Crypto Wallet For Business
• Crypto Payment Processors

Disadvantages Of Crypto Payroll

Regulatory Compliance

Employers must know the regulations and comply with tax laws and financial reporting requirements. The legal framework surrounding digital assets and the lack of established guidelines make the payroll process challenging. Companies must stay aware of the regulatory landscape while complying with tax laws and financial reporting requirements.

Volatility

The value of digital assets can be highly volatile, which means that the value of the payroll may vary significantly over short periods. The unpredictability of digital assets can lead to significant challenges for payroll management. Companies may have to adjust compensation to account for price fluctuations frequently. Managing the risks associated with crypto payroll can be overwhelming, requiring planning and diligent risk management.

Security Concerns

Digital assets require secure storage and handling to protect against theft or hacking. Employers must invest in security measures to safeguard their employees' crypto holdings. The cybersecurity risks of handling digital assets add another layer of complexity to the payroll process. Employers must prioritize the security of their employees' digital assets to prevent potential breaches and protect their financial well-being.

Employee Preferences

While some employees may welcome receiving their pay in digital assets, others may prefer traditional fiat currency due to stability concerns or lack of familiarity with digital assets. The varying employee preferences can make it challenging for employers to implement crypto payroll successfully. Companies must consider these preferences and tailor their payroll processes to meet the needs and preferences of their diverse workforce.

Is It Legal To Pay Wages In Crypto?

Even in countries where Bitcoin is legal, paying employees in Bitcoin may not be legal—at least directly. Many countries, including the US and Canada, require wage payments to be made in fiat currency to comply with labor standards. 

Because of this, it’s better to offer base pay in fiat currency and then partner with crypto exchange services like Coinbase or Bitwage that provide streamlined payroll solutions. These crypto exchange services can convert local currency into the crypto of the worker’s choosing using crypto accounting software.

Stablecoins Offer Price Stability for Crypto Transactions

Stablecoins—virtual currencies backed by fiat—work well as a substitute because they combine the operational advantages of crypto with the price stability of bank-issued money. USDC, for example, is a US-dollar stablecoin: 1 USDC represents 1 USD in assets stored off-chain.

Related Reading

• Blockchain Billing
• Blockchain For Accounting
• Crypto Compliance
• Crypto Auditing
• Crypto Escrow
• Crypto Recurring Payments
• Crypto Invoicing
• How To Accept Crypto Payments As A Business
• How To Send Crypto
• Crypto Accounts Payable
• Crypto Treasury Management
• Crypto Payment Gateways

How Is Crypto Regulated?

In the most crypto-friendly regulatory country, such as the US, bitcoin is a money services business. It falls under more strict regulations and is taxed differently than traditional currency by the IRS, which treats bitcoin as property for taxation purposes.

Many other countries ban crypto altogether. As of November 2021, nine countries have an absolute ban on crypto, which means owning or trading crypto is illegal.

• China banned all crypto activities in 2017, including mining, trading, and usage.

• Nepal banned crypto in September 2021, declaring it illegal to use, mine, or trade.

• Afghanistan banned crypto in September 2021 following the Taliban takeover and the collapse of the economy.

• Bangladesh banned all crypto activities in 2017, citing anti-money laundering laws.

• Morocco has banned crypto in the past, but a draft law aims to reverse the decision and permit its use under certain conditions.

• Egypt banned crypto transactions, considering them haram or prohibited under Islamic law.

• Iraq prohibits dealing with digital assets, punishable under money laundering-related charges.

• Bolivia banned all digital assets in 2014, labeling Bitcoin a pyramid scheme.

About 42 countries also have implicit bans on digital assets, meaning the government has restricted banks and financial institutions from dealing with crypto or offering services to crypto providers. These broad restrictions currently make it impossible to offer a Bitcoin wage globally.

Tax Implications Of Crypto

Digital assets are taxed differently from country to country. In the European Union, bitcoin is exempt from VAT (value-added tax) in light of a 2015 Court of Justice ruling of the European Union. They consider Bitcoin a supply of services. 

• In Israel, bitcoin is a taxable asset.

• In Switzerland, it’s a foreign currency. 

• Argentina and Spain treat it as income tax.

• Denmark treats it as income tax with deductible losses. 

• In the UK, corporations pay corporate tax, unincorporated businesses pay income tax, and individuals pay capital gains tax on crypto profits.

Accepting a salary in crypto would be treated like any other income for tax purposes. Companies must report payments in local currency for income tax purposes. Crypto could have additional tax appeal for high earners. In the US, profits from bitcoin have capital gains tax rates of 20%, which is lower than the current top income tax bracket of 37%. Bitcoin’s dissonant tax regulations signal the difficulty of offering Bitcoin salaries to employees. Payroll departments for international teams may struggle to track which regulations to follow when paying employee salaries.

‍5 Of The Best Crypto Payroll Software

1. Acctual: Simplifying Crypto Accounting Processes

Acctual is crypto accounting software for businesses and freelancers transacting in digital assets. It simplifies accounts payable and receivable, making it easy to pay bills and send invoices in crypto. Our flexible options let you pay in crypto while vendors receive fiat, receive crypto while clients pay in fiat, or receive fiat while clients pay in crypto. We also integrate with your accounting system, saving you time on month-end reconciliation.

Key features:

• Multi-level approvals for bills

• Fiat-to-crypto and crypto-to-fiat payments

• Built-in AML screening

• Crypto invoice links

• Automatic payment notifications

• With our smooth AP/AR process, automated bookkeeping, built-in internal controls, and flexible payment options, you can simplify your financial operations with us.

Book a call with our team to learn about how you can pay bills and send invoices in crypto with our crypto accounting software today!

2. Papaya Global: HR Service with Crypto Payroll Support

Papaya Global is an HR service that not only supports payroll payments but also offers the option for employees to receive up to 30% of their net salary in top digital assets like Bitcoin and Ethereum. This platform provides comprehensive workforce management, compliance, benefits, and fiat cross-border payments in over 100 countries. 

Papaya Global boasts automation, customization, security, and smooth integration with other systems. While the 30% cap on crypto salary payments may be limiting for some Web3 teams, Papaya Global's versatility in managing global teams sets it apart from its competitors. The ability to accommodate employees from various countries without restrictions makes it an attractive option for international Web3 teams.

3. Bitwage: Flexibility in Crypto Payroll

Bitwage is a reliable service that allows users to send or receive wages in digital assets while remaining HR compliant. Major industry players like Facebook and Uber trust Bitwage for its features like:

• Reporting and remittance

• Automated tax filing

• Employee Portal

• Time-tracking

• Flexible payroll scheduling

Bitwage supports traditional banking and up to 25 fiat currencies, adding to its versatility. The platform's flexibility shines through its smooth integration with existing payroll systems, making the transition to crypto payroll effortless for employers. Bitwage is an excellent choice for businesses looking to streamline their payroll operations while using crypto payments.

4. Deel: Global Payroll Management with Crypto Support

Deel is a dynamic platform that empowers businesses to onboard and pay employees and contractors from over 150 countries in more than 120 currencies, including digital assets. This platform excels in:

• Contract management

• Compliance

• Benefits

• Tax filing

Deel's support for managing payroll in digital assets via Coinbase, without transaction fees, is a significant benefit for US-based employees. This feature is limited to US employees and requires the use of Coinbase. Deel's ability to streamline global payroll management while supporting crypto payments makes it attractive for Web3 teams with an international presence.

5. Request Finance: Simplifying Crypto Payroll for Web3 Teams

Request Finance is a leading crypto payroll platform helping over $300 million in crypto payroll, expenses, and invoices for over 2,000 Web3 teams. This platform supports paying and receiving funds in crypto, processing salaries and bonuses in crypto, and reimbursing expenses in crypto. Request Finance's extensive compatibility with various blockchain networks and digital assets sets it apart from the competition, supporting the following:

• 140 digital assets

• 10 stablecoins

• 10 fiat currencies

• 18 blockchains

Streamlining the payroll process, Request Finance simplifies financial reporting for Web3 teams, offering features like:

• Batch payments

• Customized dashboards and reporting

• smooth integration with various wallets and accounting systems

Request Finance is the go-to choice for Web3 teams looking to simplify their financial operations and establish a solid foundation for crypto payroll management.

Choosing The Right Crypto Payroll Partner

When choosing the right crypto payment solution for your business, several key factors must be considered to ensure that the solution meets all your payroll needs. 

Ease of Currency Conversion

One important aspect to consider when selecting a crypto payroll solution is its ease of currency conversion. Your chosen solution should be able to convert between different digital assets and fiat currencies, ensuring that your employees can access their salaries in the most convenient way possible. 

Payment Flexibility from On and Off-Chain Treasuries

A crypto payment solution should offer flexibility from both on-chain and off-chain treasuries. This will allow your business more control over its funds and provide greater flexibility in how salaries are distributed. 

Global and Local Compliance

When choosing a crypto payment solution, the solution must comply with global and local regulations. This will help your business avoid legal issues and ensure that your employees are paid in a timely and manageable manner.

Security, Smart Contracts, and Transparent Processes

Select a crypto payment solution that prioritizes security, utilizes smart contracts, and maintains transparent processes. Security should be a top priority to protect your business' funds and employee data. At the same time, smart contracts can automate the payroll process and ensure that transactions are conducted smoothly and transparently.

Related Reading

• Cryptoworth Alternatives
• Bitwage Alternatives
• Cryptio Alternatives
• Integral Crypto Alternatives
• Fractal Crypto Alternatives
• Tres Finance Alternatives
• Mural Alternatives
• Bitpay Alternatives
• Ledgible Alternatives
• Best Crypto Accounting Software
• Request Finance Alternatives
• Bitwave Crypto Alternatives

Pay Your Bills In Crypto With Our Crypto Accounting Software Today － Book A Demo To Learn More

Acctual is crypto accounting software for businesses and freelancers transacting in digital assets. It simplifies accounts payable and receivable, making it easy to pay bills and send invoices in crypto. Our flexible options let you pay in crypto while vendors receive fiat, receive crypto while clients pay in fiat, or receive fiat while clients pay in crypto. We also integrate with your accounting system, saving you time on month-end reconciliation.

Key features:

• Multi-level approvals for bills

• Fiat-to-crypto and crypto-to-fiat payments

• Built-in AML screening

• Crypto invoice links

• Automatic payment notifications

• With our smooth AP/AR process, automated bookkeeping, built-in internal controls, and flexible payment options, you can simplify your financial operations with us.

Book a call with our team to learn about how you can pay bills and send invoices in crypto with our crypto accounting software today!