Paying salaries in cryptocurrency: a practical outlook

Jul 16 · 5 min read

We often talk about how TokenCard is one of the first product that enables a “Life on Ethereum”. But what does it mean? How does one live life on Ethereum? Well, it has to start somewhere: welcome to the first step of the Ethereum life — getting paid with ETH & ERC-20 tokens.

About three months ago, we started paying our employees with cryptocurrencies. To keep things simple, the rollout was progressive: the first month was ETH only, before expanding to TKN and soon DAI.

The response from the crypto community has been exciting. There was a strong interest, but also many questions regarding the practical details of our solution:

People who reached out to us to ask questions were mostly wondering about the practicalities of it:

  • How do we pick the conversion rate?
  • How do our employees handle their taxes now?
  • How do we account for the potential high fluctuation of the values of the assets we’re paying salaries with?

Similar questions kept coming back every time we were mentioning paying employees with cryptos. So we decided it was time to invite Bertie (portrait here), our in-house finance whizz who handles payroll for a chat.

He'll walk us through the practical details we had to figure out to pay our employees with ETH & ERC-20 tokens.

Are you using a crypto payroll service, such as Bitwage?

We decided to keep things simple for now, so we’re not using any crypto payroll solution. Instead, we use a fiat payroll provider (for tax reasons) while we handle the crypto payments in-house. We use to track our crypto assets and to reconcile payments.

Since the team is still relatively small (around 25 people), there was no need to over-engineer our payroll solution. However, as the headcount grows, the story might evolve. If we were 50 employees, that would be a very different situation.

How do you calculate the fiat-crypto rate?

Because of UK income tax regulations, I have to use the market rate when I submit our payroll to our payroll bureau: they need to know how much we’ve paid.

To keep it fair, I do it on the same day every month. As soon as I send the payroll recap to the bureau, we freeze the rate — it will be the one used for the conversion, even if we send the payment later.

How do people choose the share of their salary they receive as cryptocurrency?

We thrive on being as flexible as possible; however, we had to set up some restrictions to make sure our employees are able to cover their monthly expenses and comply with income tax regulations.

To ensure that all of our employees can meet their tax liabilities without worries, the crypto-share of our employees’ salaries is taken from their net pay. We don’t want them to get in trouble with HMRC (Her Majesty’s Revenue and Customs — UK’s IRS equivalent).

Employees are free to choose their repartition and tokens to be paid in. The percentage each employee chose varies, as people have to meet their fixed monthly expenses. Most of our employees take between 10 to 20 % of their net income in crypto. Some who have a higher risk tolerance go up to the 40–50% range.

Can they choose the tokens they get? Which tokens do they prefer?

Most of the team is currently getting paid in a mixture of ETH and TKN. We’re looking into branching out to DAI too.

Paying salaries in DAI adds another layer of complexity for us, as we have to time the market. Indeed, since we already own ETH (from the crowdsale), we have a decision to make, based on market conditions. We can either:

  • Buy DAI on the markets, which fixes its value, or
  • Lock our ETH in a MakerDAO CDP to produce it, which can bring down the effective cost of one DAI for us, if the markets are going up.

We’re excited to move on to DAI payments as it would allow us to offer a solution fitting all the diverse risk profiles we have in the company.

Our most risk-averse employees can have a small fluctuation-free DAI balance sent straight to their TokenCard wallet, ready to be spent with their card.

On the other hand, people with a higher risk tolerance can go for a more significant percentage of their salary paid in TKN and ETH, and then use different instruments (such as MakerCDP) to get liquidity.

Who knows what the future hold? Eventually, we’ll be able to pay people with all ERC-20 tokens supported in our wallet.

So, are most employees getting their cryptocurrencies straight on their TokenCard wallet?

Indeed, for simplicity and convenience, most of the team decided to receive their wages straight on their TokenCard wallet, so they can easily spend it.
Because of privacy reasons, some people prefer to receive it on an Ethereum address they created for that very purpose.

That’s the perfect transition! How do you handle privacy issues?

Surely, considering that all transactions live publicly on the Ethereum blockchain, indeed, privacy can be a concern. Nevertheless, if someone wants to figure out the owner of each address — who’s getting what — they have to figure out three unknown variables:

  1. The owner of each given address
  2. The base salary of this person
  3. The share of their salary paid in cryptocurrencies

Since we’re not using any 3rd party provider to handle our payroll, I am the only one in the loop who knows this information.

Still, the situation helped us realized how the lack of privacy on Ethereum translates into a tangible usability issue. We've been talking with the Aztec Protocol team to explore the options we have to conceal users' balances and their spending habits.

What about taxes? Were the employees offered some advice on how to best manage their cryptos?

Yes, since it's based on the net salary, the tax liabilities are already met. The only one left is capital gain, which is the employee’s responsibility. We brought in an advisor to answer employees questions and help them figure out.

To get the full picture, we have to dive into how taxes are handles in the UK. We have a PAYE (Pay As You Earn) system:

  1. The employers inform HRMC of each employees’ pay
  2. The company pay the employees’ taxes on their behalf
  3. The employees receive their net income directly.

Realistically, our employees don’t have to do anything but take care of the capital gain if they liquidate some of their cryptocurrencies for a profit.

Since capital gain taxes are paid on the spread between the buying and selling price, our employees need to know the rate they were paid at: we make it explicit on the payslip by displaying the £ value at the time of the payment of the cryptocurrencies they receive.

And here it is: a team paid in ETH; so what's the next step to make life on Ethereum real? We'll address assets management and how to secure your cryptocurrencies in the following blog posts.

We hope this article will help other companies on the edge of crypto-salaries to make the move. Meanwhile, feel free to reach out if you have more questions about paying people with cryptocurrencies or about us:

- 🕸 Website | 🐦 Twitter | 🎮 Discord | 👽 Reddit |✈️Telegram -


Monolith's vision is to realise the token economy by establishing it in daily life, and we’ve started with money.


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Building a fully decentralized, self-sovereign finance solution with the Monolith Visa debit card & Contract Wallet, powered by Ethereum



Monolith's vision is to realise the token economy by establishing it in daily life, and we’ve started with money.

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