what tax do you pay if a job pays in crytpoc

 Author: BlakeATO(Community Support)Community Support

ATO Certified Response6 Dec 2021

Hi @unusal

If you're paid in crypto, it will either be a salary sacrifice arrangement or will be counted as normal salary and wages.

If you have a valid salary sacrifice agreement in place, the payment is not taxable income, as it counts as being taken from your pre-tax income. However, it will be included in things like your repayment income calculation for compulsory study loans.

If you don't have a valid salary sacrifice arrangement in place, it will be subject to PAYG withholding and your employer will need to withhold tax before making the payment in crypto to you.

What you do with the crypto then dictates whether it is a personal use asset (and therefore not liable for CGT), or is an investment (and therefore liable).

If you quickly dispose of the crypto, such as using it for bills directly or converting it quickly into FIAT currency, then it will be a personal use asset. However, if you hold the crypto for long periods of time before either of these, it's less likely to be a personal use asset, and it would be liable for CGT on the value change (but not the original value you received).

You can read about paying salary or wages in crypto and personal use asset crypto on our website.