Implications of getting paid in Cryptocurrency and paying employees in cryptocurrency.

 Author: BlakeATO(Community Support)Community Support

ATO Certified Response27 Sept 2021

Hi @williamcraig What are the implications of receiving cryptocurrency for goods/services provided in a commercial environment? If you receive crypto instead of AUD, you need to include the value in Australian dollars at the time you receive it. Where that crypto then receives airdrops, you include that when you receive it as ordinary income. That airdropped amount becomes its own capital asset subject to CGT. The conversion/exchange rate doesn't account for exchange fees. Instead, these are deductions when you cash out (for the barter transactions). For the CGT assets, they go into the cost base. Remember that you'll need to take the forex rules into consideration if you receive it in non-AUD FIAT first. What are the implications of giving cryptocurrency to employees in a commercial environment? Employers must withhold tax from their employees on their salary and wages. This is PAYG withholding (not PAYG instalments). The withholding obligation is calculated at the time the employee is actually paid. This only applies where there is not a salary sacrificing arrangement in place. In the event of a salary sacrifice agreement, the amount will be liable for FBT instead. Transaction fees when paying employees are deductible. You claim them as an operating expense or as employee-related payments. You can read about cryptocurrency used in business and deductions for salaries, wages and super on our website.