A small but growing — and surprising — number of workers are rejecting Canadian dollar salaries for bitcoin, according to a Waterloo, Ont., payroll firm.
Wagepoint CEO Shrad Rao said his firm came up with the cryptocurrency payment option in November last year as a side project and did not expect any take-up.
But as the online currency gained popularity this year, he said, employees from 10 firms have signed up for the bitcoin option, and many more are asking about it.
Rao said the firms are overwhelmingly technology companies, whose workers have higher interest in new innovations and tend to dabble more.
In addition to Canadian interest, he said gets about five inquiries for bitcoin payment per month from the United States, where Wagepoint also operates, although it has not yet launched such an option in that country.
Bitcoin, a decentralized currency, was launched in 2009 by a yet unknown person or group. It gained mainstream attention in 2013, and subsequent adoption caused one bitcoin to rise to a high of $1,000.
But most brick-and-mortar shops still do not recognize bitcoin as currency, and neither does the Canadian government, which in June ruled bitcoin is property.
Canada Revenue Agency spokesman Noel Carisse said paying employees in bitcoin means paying them in goods — "a barter transaction."
"The goods — the bitcoin, in the case of digital currency — must be valued and reported in Canadian dollars," he said in an e-mail.
"The employee would then include the appropriate amount on their tax return for the year as employment income. Any tax payable would have to be paid in Canadian dollars."
For Wagepoint, however, it works differently. Rao said for tax purposes, employees are still being paid with Canadian dollars on paper.
He said workers can have all or part of their wages in bitcoins, and taxes are taken from the Canadian dollar salary before the remainder is converted.
But the payment system will not likely have mass adoption until there is regulation and widespread acceptance for bitcoin, some experts say.
