Crypto payment adoption is going on an upward trend, even in employment settings. Nowadays, individuals are not only curious about shopping or making payments in crypto, but receiving crypto salaries as well.
For instance, a 2021 research conducted by SoFi at Work found that 36% of employees based on 1,600 respondents have expressed interest in getting paid in crypto.
That said, if you want to know how to get paid in crypto as an employee or contractor, this guide is for you.
How to Receive Salaries in Crypto
The process of getting paid in crypto may vary depending on your agreement with your employer. Nevertheless, this guide can help.
1. Discuss the salary terms.
First, you have to clearly discuss and negotiate the specifics of your crypto salary with your employer. This includes the specific crypto you want to receive (e.g., BTC, ETH, USDT, USDC, KASTA, etc.), the frequency of receiving payments (e.g., monthly, bi-weekly), and the amount you will receive.
It's important to have clear communication and agreements in place to avoid misunderstandings.
2. Set up a crypto wallet.
If you haven’t already, choose a reliable wallet that offers convenience and supports the specific cryptocurrency you wish to receive. Ka.app is the best crypto app for beginners as it is easy to set up and the screens are highly intuitive.
Ka.app allows you to receive crypto hassle-free, convert crypto in a few taps, and send Bitcoin and crypto payments quickly—usually within seconds. The app is also built with a strong security system.
3. Share your wallet address with your employer.
Once you’ve successfully set up your wallet, log in to the platform, and search for the cryptocurrency you want to receive. If you prefer getting paid in Bitcoin (BTC), for instance, search for the BTC screen and copy your wallet address.
Your wallet address is your unique identifier for receiving cryptocurrencies. Include the wallet address in your invoice, and make sure there are no typos, or you may permanently lose your funds.
If both you and your employer are using Ka.app, you can just send them your QR code or mobile number to easily receive payments.
4. Be familiar with tax implications.
If you live in a country that requires income tax, salaries in crypto could be considered taxable income as well.
It’s good to note that if you hold the received cryptocurrency and its value increases over time, selling or exchanging it later may require capital gains tax as well. You may also check our article discussing if sending crypto is taxable or not to learn more.
Remember that you are responsible for reporting your crypto salary on your tax return. It's advisable to consult with a tax professional or refer to the tax regulations applicable to your location to understand reporting obligations.
4 Potential Benefits of Getting Paid in Cryptocurrency
Some potential advantages of getting paid in cryptocurrency include:
1. Quicker international transfers
Crypto may offer more efficient transactions compared to traditional payroll systems because they don’t require lengthy processes involved in banks or third-party payment processors..
Also, crypto payments can transcend geographical boundaries and facilitate international transactions without delays or complications associated with other remittance methods. This is particularly advantageous for contractors residing in countries with limited banking infrastructure.
2. Lower transaction fees
Using crypto can potentially reduce payroll transaction fees, which could benefit both employers and employees. Traditional payment methods often involve intermediaries such as banks, payment processors, or remittance services, which charge fees for their services. Meanwhile, some crypto payment platforms allow users to send and receive crypto for free. In Ka.app, for example, there are zero transaction fees involved if the sender and recipient use the same cryptocurrency (e.g., sent in BTC and received in BTC).
3. Security
Cryptocurrencies offer varying degrees of privacy, depending on the specific cryptocurrency, associated blockchain, and platform you will use. While transactions on the blockchain are transparent, the identities of the individuals involved are usually pseudonymous. This can protect users' financial information and reduce the risk of identity theft or unauthorized access to personal data.
4. Potential for value appreciation
The prices of cryptocurrencies could go up and down any minute. If you receive a cryptocurrency salary and its value increases, you may benefit from capital gains if you decide to sell or exchange the cryptocurrency at a later date.
Conclusion
Getting paid in crypto can be an exciting and innovative option for individuals seeking to explore new possibilities in handling their funds. It offers several potential benefits, including quicker and borderless transactions, reduced fees, increased financial privacy, and the potential for price appreciation.
Before deciding to receive salaries in crypto, be sure to conduct thorough research, consult with professionals, and assess your personal financial circumstances. By doing so, you can make informed choices and navigate the evolving landscape of crypto payments while enjoying the advantages it can offer.
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FAQ
How do I get paid using Bitcoin?
To get paid in BTC, you must first have a BTC wallet address. You can get one by signing up for a crypto platform or exchange. Then, you have to create an invoice including the wallet address, and share it with your employer. Most of the work will come from the employer’s end as they will be the ones processing the transfer.
Learn more about how you can easily set up a crypto wallet.
What do I need to consider before accepting crypto salaries?
Some things you have to consider before getting paid in crypto are the income tax regulations in your region, your preferred crypto to receive, which platform you will use to receive crypto, and how to cash out crypto (if you prefer to convert them to fiat later on).
What are the most popular cryptocurrencies?
The most popular cryptocurrencies in the market include BTC, ETH, USDT, BNB, USDC, XRP, ADA, DOGE, MATIC, and SOL.