Staying on top of payments can be challenging, especially when dealing with multiple digital assets. In this blog, we will explain how you can get paid in crypto with ease with crypto accounting. Keep reading to learn about how you can pay invoices and get paid through crypto.

Acctual's solution offers user-friendly crypto accounting software that simplifies getting paid in crypto. With our tool, you can easily manage your crypto payments.

Table of Contents

• Why Consider Getting Paid In Crypto

• How Can One Get Paid With Crypto?

• How To Get Paid In Crypto

• The Advantage Of Accepting Payment In Crypto

• Factors To Consider Before Accepting Payment In Crypto

• Tax Implications Of Getting Paid In Crypto

• 7 Opportunities To Get Paid In Crypto

• Can I Spend My Crypto On Daily Needs?

• How Is Crypto Regulated?

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

Why Consider Getting Paid In Crypto

Blockchain Security: Enhanced Protection and Anonymity

Digital assets provide strong security features, employing blockchain technology that secures and validates transactions. This security not only keeps your finances safe but also offers a level of anonymity unusual in traditional banking.

Efficiency in Transfers: Sidestepping Transaction Costs

Getting paid in crypto significantly reduces transaction costs, bypassing fees often associated with traditional banking systems and money transfer services. This makes it an efficient and cost-effective mode of payment, especially for global transactions.

The Investment Potential of digital assets

Digital assets are known for their value volatility, which can be both a risk and an advantage. Receiving income in crypto offers the potential to grow wealth should the currency's value increase.

Freedom of Decentralization

Crypto is not subject to control or manipulation by any government or financial institution. This decentralization gives users more control over their money, free from unexpected policy changes or currency devaluations.

Enticing Options

Considering that almost nine in ten American adults have heard of crypto and about 40% of American millennials own it, getting paid in crypto is a good option for many employees, independent contractors, and freelancers. It can make for an attractive offer, and flexible payment options such as crypto withdrawals may attract digital-savvy talent in various sectors.

How Can One Get Paid With Crypto?

Traditional peer-to-peer exchanges

One common way to get paid in crypto is through traditional peer-to-peer exchanges. Both parties set up digital wallets to store their coins and make crypto transactions. Each party must have a digital wallet to transact, and they both use a Bitcoin wallet to store Bitcoin, as different coins require different wallets. These wallets are non-custodial, meaning the user controls the wallet address and accompanying private key. 

Once these wallets are set up, the parties can transact crypto using decentralized blockchain technology. Network fees can vary by the hour, so it is essential to consider this fluctuation. Services like BitPay can generate and send standardized crypto invoices, speeding up the payment process.

Custodial wallet exchanges

Exchange via custodial wallets can also facilitate receiving crypto payments. Custodial wallets minimize network fees and simplify the payment process. These exchanges provide a crypto address for a custodial wallet, storing the user's key. While this method may have fewer fees and simpler procedures, users must trust the exchange to manage their key.

Do-it-yourself conversions

Another approach to receiving crypto payments is through do-it-yourself conversions. If an employer does not offer crypto as a form of payment, individuals can convert their paycheck dollars into crypto by buying crypto from an exchange. This method involves purchasing crypto using conventional funds and transferring them to a wallet for storage. Watch for extra transaction fees or network charges during the process.

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How To Get Paid In Crypto

Choose a crypto wallet

The first step in setting up a wallet to receive crypto payments is choosing a suitable one. Various options are available, including online, app-based, and hardware wallets. Your choice of a crypto wallet is essential to prevent potential losses due to security breaches.

Secure your wallet

After selecting a wallet, secure it with a strong password. Enabling two-factor authentication (2FA) adds an extra layer of security to protect your assets.

Backup your wallet

Once your wallet is secured, back up and store the private key safely. Losing your private key will result in losing access to your Bitcoin and other crypto assets.

Accept crypto payments

Sharing your crypto address with clients is essential for individuals looking to receive crypto payments. Always issue an invoice for the transaction and document the crypto price at the time of payment due to its volatility.

Simplified Bitcoin Payment Gateway Integration

For businesses seeking to accept crypto payments, choosing a payment processor like Acctual, Coinbase, or BitPay can facilitate the setup of a Bitcoin payment gateway for your online business. These payment solutions can be integrated into your e-commerce platform within minutes, enabling you to start accepting Bitcoin payments quickly.

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, with 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!

The Advantage Of Accepting Payment In Crypto

Transparency and Cost Savings

One advantage of using crypto payment networks is that they are transparent and have cheaper fees than traditional payment methods. All payment networks - card payments, bank transfers, or blockchain- incur various fees. The main difference lies in the amount and complexity of the fees. 

Traditional payment methods are not only costly but often confusing.

• Credit card fees

• Merchant fees

• Interchange fees

• Administrative fees

• Currency conversion fees.

Fees and Cost Efficiency

Crypto payment networks charge a gas fee for making a transaction on a blockchain, and exchanges charge a currency conversion or swap fee. These fees are shown and often cheaper than traditional cross-border payment methods, especially using more advanced blockchains.

Speed and Settlement Times

Another advantage of getting paid in crypto is speed. Depending on the blockchain network, payment confirmations can settle within seconds or minutes, compared to traditional cross-border payments, which can take days. Regardless of which network you go with, crypto payments are almost always faster than cross-border payments, especially for larger amounts.

Network Reliability

Reliability is also a factor to consider, as some blockchain payment networks have experienced repeated outages that can last for hours.

Volatility and Token Selection

Utility and governance tokens are usually highly volatile, and wild upticks or crashes in price can be observed. Volatility is one of the most important factors when considering what digital assets to get paid in. Stablecoins are the least volatile in price, as they are intended to function much like digital cash. 

Stability and Potential Growth

Most businesses, contractors, or freelancers who get paid in crypto will often opt to take payments largely in stablecoins to ensure their savings don't see sharp drawdowns in value. You can also consider getting paid partially in utility or governance tokens to profit from potential price increases and pay network fees.

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Factors To Consider Before Accepting Payment In Crypto

Security Measures

Before accepting payments in crypto, you must consider your security measures. 

• Choose a reputable wallet to store crypto assets and create strong, unique passwords to protect your accounts. 

• Implement two-factor authentication (2FA) for an additional layer of security.

• Consider using hardware wallets for larger sums of crypto since they store private keys offline. 

• Opt for wallets that offer multi-signature options to enhance the security of your assets. 

Managing Volatility in Crypto Payments

Crypto prices can be highly volatile, fluctuating rapidly over short periods. To manage this volatility, have a plan in place. 

• Consider converting crypto payments to fiat currency quickly to preserve the value of your earnings. 

• If you intend to hold onto your crypto assets long-term, you should closely monitor the market.

• Consider setting up alert systems to notify you of significant price changes.

Tax Considerations When Accepting Crypto Payments

Before accepting payments in crypto, be aware of the tax implications. In many jurisdictions, digital assets are treated as property for tax purposes. 

• Keep detailed records of all your Bitcoin transactions, including dates and values. 

• Consulting with a tax professional specializing in crypto taxes can help you with the complex tax implications of accepting crypto payments.

Choosing the Right Crypto for Payments

While Bitcoin is the most well-known crypto, there are several other options to consider when accepting crypto payments. 

• Ethereum, for example, allows for the execution of smart contracts, enabling automated agreements. 

• Litecoin and Bitcoin Cash offer faster and cheaper transactions compared to Bitcoin. 

• Stablecoins like USDT provide stability against Bitcoin's price fluctuations. 

Before deciding which one to accept as payment, consider each crypto's specific features and benefits.

Legal and Regulatory Compliance in Crypto Payments

Stay informed about the legal status of Bitcoin and other digital assets in your jurisdiction.

• When accepting crypto payments, follow anti-money laundering (AML) and know your customer (KYC) regulations. 

• Understanding and complying with digital assets' legal and regulatory requirements can help protect your business from potential legal issues.

Assessing Market Liquidity and Conversion Factors

When accepting crypto payments, consider the liquidity of the crypto you are accepting. Liquidity refers to how easily a crypto can be converted into fiat currency.

• The liquidity of your chosen crypto will impact how quickly and at what price you can convert your earnings into traditional currency. 

• Researching the available exchanges and services that offer fair-priced conversions is crucial for smooth transactions.

Risk Control Strategies for Crypto Payments

To manage financial risk when accepting crypto payments, diversify your assets. 

• To protect yourself against price fluctuations, avoid investing all your funds in a single cryptocurrency, such as Bitcoin.

• If you hold significant amounts of crypto, consider using financial derivatives like futures or options to hedge against price changes.

Tech Knowledge and Support for Accepting Crypto Payments

Before accepting crypto payments, have a solid understanding of the technology behind digital assets. 

• Be familiar with how to send, receive, and securely store digital assets, such as Bitcoin. 

• Ensure you have access to reliable technical support if you encounter any issues with your crypto transactions. 

• Understanding crypto technology and access to support resources will help you navigate potential challenges when accepting crypto payments.

Tax Implications Of Getting Paid In Crypto

Digital assets are taxed differently depending on the country. Bitcoin, for instance, is tax-exempt in the European Union and treated as a supply of services. In Israel, however, it is considered a taxable asset. 

The variations in how Bitcoin is taxed globally underscore the complexity of offering Bitcoin salaries to employees. Companies must report payments in local currencies for tax purposes, adding to the challenge of navigating the complexities of offering salaries in crypto.

Tax Implications of Bitcoin in the US

In the United States, individuals are subject to capital gains tax on Bitcoin profits, ranging from 0% to 37%. Despite the tax appeal for high earners, accepting a salary in crypto is treated as regular income for tax purposes. Payroll departments handling international teams may struggle to understand which tax regulations to follow when paying employees in Bitcoin. This paradox is a testament to the varying regulations governing Bitcoin taxation globally.

7 Opportunities To Get Paid In Crypto

There are opportunities to earn crypto in the current digital age. Here are a tried and tested methods:

1. Freelancing

Many freelancing platforms now offer the option to be paid in crypto. Fields like graphic design, programming, writing, and digital marketing are particularly receptive to this form of payment.

2. Crypto Mining

You can mine digital assets if you have the necessary resources and technical knowledge. Miners validate transactions and add them to the blockchain; in return, they're rewarded with new coins.

3. Working for a Crypto Company

Many blockchain and crypto companies offer their employees the option to be paid in crypto.

4. Online Marketplaces

Websites like Bitify and OpenBazaar are online marketplaces where you can sell goods or services in exchange for digital assets.

5. Crypto Faucets

These websites reward small amounts of crypto for completing simple tasks or CAPTCHA. It's a slower process, but can be a start for those who want to dip their toes into the crypto world.

6. Staking and Yield Farming

Some digital assets offer rewards for staking or lending your coins. This process involves locking up your crypto for a certain period to help maintain the operations of a blockchain network.

7. Accept Crypto Payments

If you're a business owner, consider accepting crypto as payment for your goods or services. This can attract a wider customer base, especially among tech-savvy consumers.

Can I Spend My Crypto On Daily Needs?

One common misconception about crypto is its supposed lack of spendability. Many major online retailers, including Overstock and Shopify stores, now accept Bitcoin and other digital assets directly. A growing number of physical stores also welcome digital assets as payment.

Crypto Debit/Credit Cards

There are numerous crypto payment cards for places where crypto is not directly accepted. These work similarly to a regular debit or credit card and allow you to fill up your card with a specified amount of crypto converted into your local fiat currency, allowing you to spend your crypto earnings just like traditional money.

Stablecoins for Practicality

Certain digital assets, such as stablecoins, are tied to the value of a more stable resource, like the US dollar. This makes them less susceptible to the volatility commonly associated with digital assets, making them a more practical choice for daily expenses.

Navigating Limited Acceptance

While digital assets are increasingly accepted, their use is still limited in some regions and services. Consequently, a complete transition to a crypto salary may require a combination of direct crypto payments, crypto payment cards, and exchange into local fiat currency.

How Is Crypto Regulated?

In many countries, Bitcoin and other digital assets are not real money or legal tender. The exceptions are El Salvador and the Central African Republic, which have made Bitcoin legal tender.

One of the most comprehensive reviews of global crypto acceptance was conducted in 2018 by the Library of Congress’s Global Legal Research Directorate. The review surveyed 130 countries regarding their government and central bank stance on Bitcoin mining and payments. It identified very diversified treatments, ranging from permissive to restrictive.

Countries with friendly regulation

In the most crypto-friendly regulatory landscapes, such as the US, Bitcoin is a money services business. It falls under more stringent regulations and is taxed differently than traditional currency by the Internal Revenue Service (IRS). The IRS treats Bitcoin as property for taxation purposes.

Countries with restrictive regulation

Many countries ban crypto altogether. The US Library of Congress Regulation of Crypto around the world identifies nine countries with an absolute ban on crypto, meaning owning or trading crypto is illegal. 

The nine countries with official bans are:

• Algeria

• Bangladesh

• China

• Egypt

• Iraq

• Morocco

• Nepal

• Qatar

• Tunisia

42 countries 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 crypto payments globally.

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, with 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!

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