An increasing number of employees are opting to receive payments via Bitcoin. According to a Waterloo payroll firm, ten firms have signed up for their salary to be paid in Bitcoin. The CEO of Wagepoint, Shrad Rao, said the firm added the option in November of last year and was not expecting very many people to sign up.
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.
Rao said these firms were mostly technology companies who workers have a higher interesting in innovations. In addition to the interest in Canada, he said he gets around five inquiries for Bitcoin payment a month for the U.S.A, where Wagepoint also has a separate office. Wagepoint does not currently offer the same Bitcoin payment option to their employees in the U.S.A.
While most brick-and-mortar shops don't accept or recognize Bitcoin as currency, there is a growing number of online businesses willing to accept Bitcoin as payments. Overstock, Dell, Tiger Direct, and Expedia are some of the largest firms to accept Bitcoin. In fact, Tigerdirect.ca just began accepting Bitcoin three months ago. TigerDirect has sold over $1 million dollars worth of merchandise with Bitcoin since January.
Bitcoin and Tax
Employees who receive their salaries in Bitcoin still have to pay taxes though. Canada Revenue Agency spokesman Noel Carisse said paying employees in Bitcoin is the equivalent of paying them in goods – “a barter transaction. The goods – the Bitcoin, in the case of digital currency – must be valued and reported in Canadian dollars.”
For tax purposes, Wagepoint is still showing they are paying their employees wit Canadian dollars – at least on paper. Employees who choose to have their wages in Bitcoin will have the taxes taken out from the Candian dollar salary before the remainder is converted. In essence they are taking out the middle man, saving you the step of converting your paycheck in bitcoins.
There is doubt that being paid in virtual currency will expand beyond tech companies. Other more traditional type companies are skeptical and few people truly understand Bitcoin. For people who live paycheck-to-paycheck, being paid in Bitcoin isn't practical. The risk of the value going down is too great and there needs to be widespread adoption before we see any major adoption.
However, even those who earn exclusively in bitcoins cannot escape traditional currency.
Michael Perklin of Bitcoinsultants who does business in virtual currency has not earned Canadian dollars since February. Michael does not use Bitcoin directly in most day-to-day transactions. He uses third-party services that allow him to make regular purchases and bill payments in Bitcoin, as well as sells bitcoins for cash.
For instance, Perklin’s mortgage is paid for through a Canadian dollar chequing account where he deposits funds after selling bitcoins on online exchanges. Perklin said living completely without traditional currency may be possible in the future, but it is difficult to do right now.
I have to interact with Canadian currency,
That’s a fact of live in the country I live in.
Will this create a Buy Pressure?
An added bonus from employers paying their employees wages with Bitcoin is the price of Bitcoin will experience upward pressure. As stated in earlier articles, the price of Bitcoin is experience downward pressure due to merchants and the proof-of-work system Bitcoin is based off of. As business are forced to purchase Bitcoins in order to pay their employees, we can expect upward pressure and even regular buy times for these companies. This is just one more step in the direction towards creating a stable currency.
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