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Tax Implication on Salary if significant portion is paid as Bitcoin

Newbie

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I have an option for getting paid a portion of my salary as Bitcoin - what are the tax implications from an immediate standpoint, and when I sell Bitcoin to AUD.

 

Scenario:

  1. suppose my current salary is $150k in AUD and I change my salary to be, $75k AUD and $75k Bitcoin, how do I calculate the tax?
  2. If our salary is 75k AUD and 75k Bitcoin, and I sell my bitcoin after 12 months, what tax is paid when the bitcoin is sold?
1 ACCEPTED SOLUTION

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Most helpful response

ATO Certified Response

Community Moderator

Replies 0

Hi @OneCryptographe 

 

Thanks for your question.

 

If you do not have a valid salary sacrifice agreement in place and simply ask to be paid a portion of your salary in Bitcoin, you derive your normal salary. Your employer will also have to meet their pay as you go obligations on the Australian dollar value of the Bitcoin paid. From what you have said in your query, this looks to be the most applicable to your situation. In this case, you will work out your tax on the total Australian dollar value of your salary, paid in Australian dollars and Bitcoin.

 

You can read more about Paying salary or wages in cryptocurrency on our website.

 

You will make a capital gain if the capital proceeds from selling the Bitcoin are more than its cost base. The cost base of the Bitcoin will be its market value (the Australian dollar value) when you receive it as part of your salary. By holding it for 12 months or more, you may be entitled to the 50% CGT discount.

 

See also:

Transacting with cryptocurrency

Working out your capital gain or loss

Record keeping for cryptocurrency

2 REPLIES 2

Community Moderator

Replies 0

Hi @OneCryptographe 

 

Great questions!! We will check this out with our colleagues and do some research and let you know.

Most helpful response

ATO Certified Response

Community Moderator

Replies 0

Hi @OneCryptographe 

 

Thanks for your question.

 

If you do not have a valid salary sacrifice agreement in place and simply ask to be paid a portion of your salary in Bitcoin, you derive your normal salary. Your employer will also have to meet their pay as you go obligations on the Australian dollar value of the Bitcoin paid. From what you have said in your query, this looks to be the most applicable to your situation. In this case, you will work out your tax on the total Australian dollar value of your salary, paid in Australian dollars and Bitcoin.

 

You can read more about Paying salary or wages in cryptocurrency on our website.

 

You will make a capital gain if the capital proceeds from selling the Bitcoin are more than its cost base. The cost base of the Bitcoin will be its market value (the Australian dollar value) when you receive it as part of your salary. By holding it for 12 months or more, you may be entitled to the 50% CGT discount.

 

See also:

Transacting with cryptocurrency

Working out your capital gain or loss

Record keeping for cryptocurrency