A CBC News story from September 1, noted how a a small – but increasing – number of employees are beginning to accept the online quasi-currency Bitcoin as payment for their wages. This is evidence perhaps of the growing acceptance of Bitcoin by merchants and the increasing discussion of Bitcoin currency exchanges. Bitcoin began in 2009, and has been gaining more widespread attention in 2013. (See this link for a short video on Bitcoin’s operations).
Shrad Rao, the CEO of Waterloo, Ontario, payroll processing firm Wagepoint, stated that last year they began offering a Bitcoin payment option to employees of some clients. Rao said this was only a “side project”, and Wagepoint was really not expecting any uptake by employees. But, employees from ten of Wagepoint’s clients have taken advantage of the Bitcoin option to date. Not surprisingly, most employees opting to accept Bitcon are from firms in the technology sector.
Wagepoint allows participating employees to take all, or part, of their wages in Bitcoin. Canadian payroll taxes are deducted from the gross pay by Wagepoint before the employee can take any of the remainder in Bitcoin. Meanwhile, the Canada Revenue Agency’s (CRA) position is that Bitcoin is not a currency. Rather, it views Bitcoin as property. In other words, a payment in Bitcoin is viewed by CRA as a barter transaction. It is still taxable, however, and those receiving it as payment of wages are expected to declare the Canadian dollar value of the amounts received on their tax returns.
1) Would you be interested in accepting some or all of your pay in Bitcoin? Why or why not?
2) If you were an accountant at one of these firms, how would you measure the value of these Bitcoin payments when you were recording the payment of payroll?
3) What do you think the future of Bitcoin, the digital currency, might be?