Salaries paid in bitcoin on the rise in Canada
There is a growing number of requests for Canadian employees to have their salaries paid in Bitcoin; CBC News reports that Canada employees are increasing the requests to be paid in bitcoin. Some companies have already proposed this option to their workers. According to Canadian tax laws, salaries received in Bitcoin are viewed as barter income and taxed based on the equivalent in Canadian dollars.
A small but growing and surprising number of workers are rejecting Canadian dollar salaries for bitcoin, according to a Waterloo, Ont., payroll firm.
Noel Carisse, a Canada Revenue Agency spokesman explained that paying employees in bitcoin means paying them in goods, a situation a little bit like a barter transaction.
“The goods, meaning, the bitcoin, in the case of digital currency, must be valued and reported in Canadian dollars.”
Some companies are already offering the choice of part or all of one’s wages in Bitcoin. Employees selecting the “all” option are technically able to take on far more risk than allowed for employees opting to take the maximum portion of their salary in company stock, which is usually less volatile.
Shrad Rao, Wagepoint CEO explains that his firm launched the option last year but didn’t expect much uptake.
Yet, employees from 10 different companies have signed up for the option and several more have shown interest. Rao states that some inquiries the company receives even come from the US, where the firm has not even yet launched such an option. His firm came up with the cryptocurrency payment option in November last year as a side project and it has had much success.
For Wagepoint, however, it works differently. Rao said for tax purposes, employees are still being paid with Canadian dollars on paper.
He said workers can have all, or part of their wages in bitcoins, while taxes will be taken from the Canadian dollar salary before the remainder is converted.
“The employee would then include the appropriate amount on their tax return for the year as employment income. Any tax payable would have to be paid in Canadian dollars.”
Even though bitcoin is strongly implanted in Canadian borders, most brick-and-mortar shops still do not recognize bitcoin as currency, and neither does the Canadian government, which in June ruled bitcoin is property.
In addition to Canadian interest, Rao says he gets about five inquiries for bitcoin payment per month from the United States, where Wagepoint also operates, although it has not yet launched such an option in that country.
Another expert commented that virtually all employees taking this option work in the tech sector, where many are keen to explore and embrace new technologies. Cissy Pau of the Vancouver-based Clear HR Consulting said:
“Tech companies, I can see that. But I just can’t see that in, say, Canada Post, a more traditional-type company with more traditional-type workers. I would suspect that people will be highly skeptical. What’s interesting is that we’ve actually had customers come to us because of the bitcoin integration, which we were not expecting at all.”
Cissy Pau of the Vancouver-based Clear HR Consulting, which deals with small businesses, predicts being paid in virtual currency will not expand beyond the tech world because there are currently too few places to spend it.
Currently, Even for those who earn exclusively in bitcoins it’s still impossible to escape traditional currency.
Photo source 1:vpncreative.net
Photo source 2:onbitcoin.com
Photo source 3: forbes