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By Pranesh Anthapur, Kraken Chief People Officer
The blockchain technology is improving and expanding payroll capabilities. Global employees may be interested in a wider selection of digital assets such as NFTs, cryptocurrenciesBitcoin IRAs are also available.
Let’s explore why and how to empower employees with unprecedented control over their financial future.
The global case of crypto payroll
Kraken is proud to offer Krakenites a way to receive their paychecks in crypto if that’s what they want. Many Krakenites can purchase crypto by using net payroll deductions each pay period. dollar-cost averageThe cryptocurrency of their choosing. More than a third of our Krakenites opt to receive a portion of their paycheck in crypto. Many of them even choose to receive their entire paycheck in crypto.
Crypto payroll options do not only apply to those who work in the crypto-industry. Some companies allow U.S. 401(k), retirement plan contributors to invest in bitcoin along with stocks and mutual funds. The excitement for cryptocurrency has spread to the general public.
- Research conducted by NYDIG36% of employees aged under 30 said they would like to receive a portion of their salary in bitcoin. In addition, about one-third of these employees – if given the opportunity to choose between two comparable positions at different companies – would prefer the one that offered to pay them in bitcoin.
- Recent Studies Have Affected the Amount of Money You Spend Aquent surveyThe younger generations are more open-minded to the idea that crypto can be used as an alternative option for payroll. Millennials (55%) are the most receptive, followed by Generation Z (56%). Baby Boomers (33%) have the least openness.
Bitcoin and Ethereum’s ether, the two most traded cryptocurrencies, are leading the way in popularity and investment enthusiasm. People of all ages prefer bitcoin (62,7%) and ether (26,5%) to USDC (8.7%%) and Tether (1.4%). This shows that investors have confidence about the potential profitability of digital assets.
- The following are some of the ways to get in touch with each other Investopedia surveyMillennials are the biggest cryptocurrency investors, with 38% having already purchased it.
Cryptocurrency has a solid reputation as a global payment system and an investment asset. But its long-term benefits to businesses go far beyond, with more worldwide.
Five reasons to consider crypto as a payroll alternative
Integrating blockchain payments into your company has many benefits:
Hire top global talent
Cryptography is a natural phenomenon. Globally inclusive. You can use crypto benefits to attract and retain top talent that may not prefer being paid in their native currency. Employers can send money around the world without incurring costs associated with traditional bank transfers and wires.
Secure payments for little cost
Employers no longer need to create subsidiaries for their staff, but can instead create bank accounts at different locations. Employees can easily create their own crypto wallet or a Hardware wallet. This wallet is used to store and protect cryptocurrency. It is a physical device that stores users’ private keys and public addresses in an offline environment, providing an extra layer of security against online threats.
Consider giving out a “hardware wallet bonus” on a new hire’s first day. You could include a hardware Wallet as part of your new-hire orientation. Wallets can cost a few hundred bucks and are a thoughtful way to help employees protect their digital assets.
Employees have the option to receive crypto every payment period. They can accumulate cryptoassets by dollar-cost-averaging. This strategy involves investing the same amount of money into an asset on a regular basis. By adopting this approach, employees’ fixed payment amounts will automatically purchase more crypto when prices are lower, and less when prices are higher.
In certain countries, employees may face high inflation with their native currency. Stablecoins and crypto can be an alternative to hyperinflationary currencies in certain countries, allowing employees to make their financial decisions. Paying employees in cryptocurrency shows that your company values their financial freedom.
Future-proof your employer branding
By the year 2025 three-quarters of the world’s workforceThe future workforce will be dominated by millennials. Employees are now looking for benefits and perks that support their lifestyles. If employers embrace the future digital economy, they’ll modernize an employer brand fit for the future of work.
Considerations about crypto payroll
Even for a company that is a native crypto-native, like Kraken it’s important to stay vigilant about the constantly changing landscape associated with crypto payroll. Consider the following.
Regulatory compliance is essential
Different countries have different crypto regulations. And these laws can be changed quickly. Consult legal counsel before selecting a crypto payroll platform.
Understanding tax implications
Employers need to understand the tax regulations in their jurisdictions that are related to crypto payroll. Tax obligations may differ depending on how different tax authorities classify crypto payments. For compliance, it is important to keep accurate records and report, including proving fair market value.
It is important to keep taxes withheld from crypto payments as you would traditional payroll in order to avoid penalties. Due to the complexity of crypto payroll taxes, it is best to seek professional advice from cryptocurrency specialists.
It can be risky to use a crypto exchange as a payroll system, since some exchanges are more susceptible to hacking. Companies must take extra precautions to protect themselves. Security precautionsWhen using crypto exchanges to pay your employees. Find trusted and secure crypto solutions by doing your own research.
Cryptocurrency can help you achieve financial freedom
Employers need to be aware of the impact of employee compensation on engagement and retention as well as the increasing demand for alternative payment options.
Employers can demonstrate innovation and global inclusivity by offering crypto as an alternative to traditional payroll and leveraging the benefits of blockchain-based compensation. They can also take proactive measures to ensure the future well-being and happiness of their employees.
Are you, or is your company, new to cryptocurrency? We believe crypto shouldn’t be cryptic. Find out more about NFTs, blockchain, and crypto here:
These materials are intended for general information only. They do not constitute investment advice, a recommendation to buy, hold, stake, or sell any cryptoasset, or a solicitation to engage in a specific trading strategy. Kraken will not attempt to increase the price of any cryptoassets you buy. Some crypto products are not regulated and you may be unprotected by government compensation schemes and/or regulatory protection schemes. Crypto-asset markets are unpredictable and can result in a loss of money. Taxes may be due on any returns and/or any increases in the value of cryptoassets. You should seek independent tax advice to determine your tax position. Geographic restrictions may apply.