More than 55% of Millennials and Gen Z have expressed interest in receiving their salary in crypto.
While the actual number of companies across the globe running crypto payroll is a little murky, something is clear:
As older generations age out of the workforce and newer generations start to move up in companies, the way in which we work is continuing to change exponentially.
People connecting and working internationally will become ever more normal. A study from ZeroHash also points out that 58% of people feel that traditional banking infrastructure doesn't serve the international workforce. There are high fees, currency issues and slow payments.
We can unpack a couple of pints from these statistics:
There's a demand for people to be paid in crypto
Current methods are outdated for the IoT and Web3 era
And where there's a frustrating problem coupled with a clear solution, the outcome is surely inevitable… Forward thinking companies will start adopting crypto payroll.
This technological switch has the opportunity to touch all corners of the globe. This isn't just high tech for developed nations. In fact, we can already see its effect across the world, with the top five countries with the most contractors paid in crypto being the US, India, Great Britain, Nigeria and Morocco.
So if you're considering ways to run crypto payroll, then you'll find everything you need to get started on this page. In this crypto payroll guide, we'll dig deep into setup, compliance, choosing the right payment platforms and best practices. So you'll be one step ahead in improving efficiency, reducing costs and catering to this global workforce.
What is crypto payroll?
Crypto payroll is a method of paying employees their salary using blockchain technology and cryptocurrency. It offers numerous benefits, from near instant settlement times to reduced cross border fees and complete accessibility.
The peer to peer design of cryptocurrency allows one individual entity to send funds directly to another. So in effect, with crypto payroll, a salary could be sent directly from a business's crypto wallet into a staff member's crypto wallet without the need for a third party intermediary or bank. It can help to automate the payroll further and reduce admin burdens and human error.
While crypto payroll can empower businesses to pay teams globally in an instant, there are some stumbling blocks. For example, a business needs to be set up correctly to deal with these payments. There are requirements to manage both fiat and cryptocurrency addresses, local payroll regulations, tax withholding and paying social charges.
It's why most businesses running crypto payroll need to rely on a specialist platform rather than running wallet to wallet transfers. Below, we'll show you the top tools that you can get started with today to make this straightforward.
What currencies are used in crypto payroll?
While Bitcoin and Ethereum are the most popular and well known cryptocurrencies, they're often not favored for payments. This is for a couple of reasons:
With Bitcoin payroll, transaction fees can be high, reaching several dollars or even more during busy network periods
They are volatile cryptocurrencies, prices can spike and dip 5% or more in a matter of 24 hours
Using these types of cryptocurrency for payroll would be problematic because calculating the value of a salary to pay would be constantly fluctuating. That's why crypto stablecoins like USDC and USDT have been developed. These are digital assets that always retain a stable value.
USDT and USDC are the top stablecoins. In fact, USDT is the third most popular cryptocurrency after Bitcoin and Ethereum. They aim to always be pegged one to one to the US dollar, meaning one coin is always worth one US dollar.
This helps to bridge the volatility problem and make crypto payroll a viable option. In many ways, they act as a digital dollar that can be sent across the world over blockchain technology in seconds for very low fees. There's no need to wait for banks, cross border currency transactions and clearing houses.
Plus, everything is completely transparent, recorded on the public blockchain. So all parties can always see where the funds are during the payment process.
The top crypto payroll companies and platforms
So, what do you actually need to get started delivering salaries using crypto payroll?
Well, as mentioned, it's tricky to do with just a standard crypto wallet, which is why a number of crypto payroll providers are offering high tech solutions to the industry. Let’s take a closer look at these blockchain payroll companies:
Acctual
Acctual is a leading way to implement crypto payroll. It allows businesses to make payments in both fiat and stablecoin currencies. For example, a company in the United States could pay a contractor in Nigeria through Acctual. The US based company could pay in US dollars and the employee could receive funds in USDT stablecoin or vice versa.
It's a platform that simplifies the management of crypto payments for your international team members. There's even a feature for batch pay so you can pay your entire team in one go to save on gas fees and time. When it comes to fees, they are attractively low! You can get started for free and use flexible payment options for just 1%.
Bitwage
Bitwage is a global payroll system that aims to make payments flexible for employees and freelancers using crypto. The platform acts as an intermediary between employers and workers. Essentially, businesses send funds to Bitwage, which then converts and makes the payment to employees. Founded in 2014, it offers a diverse set of payment options, including Bitcoin, Ethereum and stablecoins, to around 200 countries. Some people report fewer HR and accounting integrations than newer competitors. In addition, each worker can cost as much as $15.99 when integrating the system. An extra frustrating cost for startups or a growing bill for larger corporations!
Deel
Deel is similar to Bitwagin in that it is a global HR and payroll system for both fiat and crypto payments. It provides versatility for international operations. The company puts a strong focus on helping companies expand globally while adhering to compliance. Branded as a ‘People Platform’, it works to help businesses onboard and streamline teams worldwide without the need to open multiple legal entities in various jurisdictions. While it offers a huge choice of options, including contractor management, Employer of Record and payroll, prices are higher than those of competitors, reaching $599 per employee per month in some cases.
Rise
Rise is trying to capitalize on the changes in the way the world is working. We’ve already discussed the mismatch between worker demands and the global infrastructure for payroll. Rise has certainly identified this too and is designed to support remote companies with international employees. It helps to bridge the gap between fiat and digital currencies so organizations can stay flexible. Like Deel, there are extra services layered into the platform, but monthly fees come from the start, running from $50 per contractor or 3% of payment volume up to $399+.
Payroll wallet setup and management
One important factor that you might forget about when implementing crypto payroll is training and technical barriers. Your internal staff need to be comfortable using crypto wallets and understanding the different digital currencies they are using.
This also extends to employees receiving payments in crypto. Without the proper equipment and software, funds could be lost. Adding to this, understanding how stablecoins like USDC work is crucial.
Security is obviously paramount to prevent loss or theft, just like anything of value. But time needs to be taken to ensure both parties are set up with secure, functional wallets, plus everybody is working off the same chain.
For example, USDC can be bridged across multiple blockchains. That means everyone needs to understand how this operates. Mainly, whether payments are being sent and received using Ethereum, Solana or another blockchain, as this directly affects the asset and the choice of wallet and storage.
Security measures for a business also need to be taken into account. The traditional banking system has several layers of security that stop staff from stealing and carrying out fraudulent behavior with finances.
Crypto isn't quite as developed as this. So it's important to invoke strong security measures. Multi factor authentication should be used with cold storage and hardware wallets if large amounts of crypto funds are stored. Adding to this, you need to ensure multisig payments are being used so that no single person is able to make a payment and potentially empty a crypto wallet.
Regulatory compliance considerations
The regulation surrounding a business's use of cryptocurrency for payroll varies from jurisdiction to jurisdiction. Some countries allow it, others have severe restrictions and some even ban cryptocurrency altogether.
So, if you're solely relying on crypto for your global payroll, it might mean you are not able to access employees in certain markets where crypto is less popular or banned.
Employers also need to ensure they're compliant with local labor regulations and tax laws. You'll still need to adhere to cross border regulations for your international payments. Not complying with recognized processes such as anti money laundering (AML) and know your customer (KYC) can result in fines or legal action.
When using stablecoins, there are also new tax burdens to think about. Firstly, for both parties, a salary paid in crypto is treated as taxable income. That means as an employer, you'll need to report and withhold taxes as appropriate and pay these funds to the government. You'll need to be using your local fiat currency rather than cryptocurrency.
As for employees, the funds they receive as a stablecoin like USDC are often classed as taxable income in most countries.
Both parties also need to understand the taxable events that might occur when dealing in stablecoins. A lot of countries like the US denominate all cryptocurrencies as property rather than currency. That means every time you buy, sell, dispose of, trade or make payroll in stablecoin, it needs to be recorded as a taxable event.
This is because there is potential for a capital gain or loss and although stablecoins might not change in value, this information needs to be recorded in case of any tax audits. Additionally, trading between different, more volatile cryptocurrencies is going to trigger capital gains taxes, so it presents a double taxation problem to think about.
Essentially, both parties need to make a cost basis valuation at the time of receiving and paying with cryptocurrency.
Accounting and record keeping
All of this makes keeping records and accounting for payments correctly very important. Governments are getting hotter on digitizing tax systems. This includes scrutinizing cryptocurrency payments.
Another reason you need to find a reliable crypto payroll platform is that it helps to maintain detailed records and reconcile with your fiat accounting systems. It's the only way to smoothly run crypto payroll while staying compliant.
Benefits of crypto payroll
So yes, there's tax, there's compliance, there's crypto education. But as we've seen in the statistics, automated crypto payroll solutions are arriving quickly into the financial system and there's a big reason for that. There are incredible advantages compared to traditional fiat payments:
1. Low Fees
Cryptocurrencies generally have incredibly low fees. It can allow you to send payments internationally for just a few cents. It removes wire transfers, SWIFT and currency exchange fees for a significant saving.
2. Speed
Blockchains can settle payments in a matter of seconds. The fastest cryptocurrencies feel like almost instantaneous processing and completion. That's huge when compared to traditional payments, particularly internationally, which can take anywhere between one and five days to complete.
3. Complete transparency
Traditionally, once money leaves your bank account in the payment process, it disappears behind banks and it's hard to trace until money ends up in the recipient's bank account. Crypto is the opposite.
Everything is transparent. Anyone can trace the status of a payment on public ledgers. That means your staff won't be waiting around or wondering where payroll is. They'll be able to check whether the payment has been made and the status of the transaction at any time. A nice way to remove some headaches from HR!
4. Accessibility
Crypto provides access for the unbanked workers of the world, particularly in developing nations where people might not have access to the traditional banking system. It means they wouldn't usually be able to work for companies abroad.
With crypto, a company can stay compliant in their nation and an unbanked individual can receive funds into their crypto wallet. All they really need is a phone and an internet connection to get paid for their work.
5. Attracting savvy talent
Younger generations are keen to get paid in cryptocurrency. They're also the most tech savvy. So if you're looking to attract the freshest talent into the marketplace, then offering salaries in stablecoin could be just the thing that sets your company apart.
6. Appreciation
Employees have the benefit of appreciation of cryptocurrency values, specifically if you're paying in more volatile cryptocurrencies like Bitcoin. The allure of long term investment returns could encourage your staff to save rather than spend their salary. Even if you're just paying in stablecoins, it allows them to easily move their digital assets into potentially more lucrative investments.
Challenges and risks of crypto payroll
While crypto payroll has fantastic perks, it also brings a new set of challenges. It's worth taking a good look at these potential pitfalls before you begin:
1. Volatility
Asset selection is critical. It's important to avoid using highly volatile cryptocurrencies where possible. That's why stablecoins offer the most beneficial way to pay staff, both domestically and internationally. Or if you're relying on fluctuating prices, methods to instantly convert into fiat are preferable.
2. Liquidity
Factoring digital currency into your cash flow is key. It means your accounts team needs to ensure there is a sufficient crypto reserve to make the necessary payroll every week or month.
This should also be backed by a reliable conversion partner. If you don't have a way to easily convert fiat into crypto for business, it's going to be tricky to always meet your commitments.
3. Regulation
The regulations surrounding all cryptocurrencies are still murky in many cases. While the general treatment for assets and tax purposes is relatively established, there can be several grey areas for payments and employment. As legislators adapt to the digital economy, crypto payroll regulations are likely to change. So monitor these changes and make sure to adapt quickly.
4. Technical Issues
Perhaps the biggest hurdle to running a crypto payroll is the technicality of adding it into your organization. You need to invest in trustworthy, robust platforms. Your provider should have a trustworthy track record within the crypto industry, including strong security protocols and adherence to payment regulations.
Best practices for success with crypto payroll
Start with a hybrid approach. Offer crypto as an optional salary payment method, don’t enforce the change on everyone.
Create clear policies. Write down your crypto payment options, conversion rates, payment dates and how you’ll handle those wild price swings. If in doubt, use stablecoins.
Educate your team. Share wallet setup guides, security tips and critical crypto know how with your finance team and employees.
Strengthen security. Use multi factor authentication, hardware wallets for company funds and multi signature authorization for transactions.
Build payment relationships. Find a payment partner like Acctual that is designed to work with crypto, so converting between fiat and digital currencies doesn’t turn into a headache.
Stay regulation ready. Make backup plans for regulatory changes and keep up with compliance rules wherever you’re operating.
Keep detailed records. Track every transaction, cost basis and policy decision; your tax team will thank you later.
Get expert guidance. Talk to accountants and legal pros who actually understand crypto, especially when you’re just starting out.
Choose the right stablecoins. Stick with established options like USDC or USDT; they’ve got the track record, stability and liquidity you need.
Test before scaling. Try a pilot run with a few tech savvy employees before rolling it out to everyone.
Simplify crypto payroll with Acctual
If you're looking for a global crypto payroll solution, then Acctual is ready.
The platform provides complete stablecoin payroll processing and integrates directly with your accounting and ERP system.
Data entry is automated and human errors are eliminated. It saves time for your business and keeps employees happy with minimal mistakes.
The beauty of Acctual is that it allows businesses to switch between fiat and cryptocurrency and stablecoins smoothly.
For example, if you want to pay employees in a foreign country using stablecoin payroll, it eliminates all the technical hassle.
You can pay directly from your fiat bank account and Acctual will deliver the funds to your employee in a stablecoin.
As an employer, you could pay using US dollars from your bank account and your employee could receive their funds straight to their crypto wallet in USDC. Or vice versa and everything in between.
Plus, you can set up batch pay too, so you can run all your payroll in one go. From custodians like Fireblocks, multi sig options like Safe or even a hot wallet like Metamask, companies can run batch payments to all their employees. It's a huge time saver and reduces gas fees.
Acctual is here to simplify the management of crypto payroll. You can get started in two minutes with a free account today.
Blog
