Israeli company Papaya Global offers its multinational clients the opportunity to pay part of their employees’ salaries in cryptocurrency.
On Tuesday, workforce management company Papaya Global announced that if the employees in their client companies so desire, they can get paid up to 30% of their net salary in Bitcoin, Etherium, and other cryptocurrencies, instead of conventional currency such as dollars, shekels, or pounds.
“By enabling partial virtual payment, we are able to keep our clients compliant within their global operation while creating added benefits for their employees,” Eynat Guez, cofounder and CEO of the fast-growing startup said in a statement.
These cryptocurrencies are digital currencies that use cryptography to secure transactions. Bitcoin is arguable the most famous one, making the news frequently as its value has skyrocketed over recent weeks. As a “decentralized cryptocurrency,” which is not controlled — or backed — by a banking system such as the Federal Reserve, such forms of currency remain largely unregulated.
In the United States and Israel, for example, the tax authorities have ruled that bitcoin will be treated as property for tax purposes as opposed to currency, meaning that people who sell it will be subject to capital gains tax. Many other countries have not even decided yet on its legality. This makes it a riskier commodity to own, yet its popularity is undeniably rising.
However, few companies have offered it as a payment method due to regulation and compliance concerns. Papaya says it solved this issue by limiting the cryptocurrency payment to 30% of the employee’s net salary. This ensures that organizations stay compliant with local tax and reporting regulations while also keeping a lid on employee salary allocation to such a volatile and new exchange medium.
Guez is confident that becoming part of this new trend will add to her clients’ appeal as employers.
“There is no doubt that the option will be attractive to prospective employees,” Guez told the CTech website. “Purchasing bitcoin on your own is a headache because of the regulations and fees. If the employers purchase them for you, it certainly simplifies things.”