Ask SN: How to describe "earning in bitcoin" versus simply being "paid in bitcoin"?
36 sats \ 6 comments \ @earnbitcoin 20 May 2022 bitcoin
When someone says they "get paid in bitcoin" or that they "earn in bitcoin", most of the time what they are saying is that they are earning a certain amount of fiat (e.g., $N per week) and when the payment is transferred, that amount of fiat is converted into bitcoin at the exchange rate at that time and then paid in bitcoin.
But with the current exchange rate, this might be a good time to try to get earnings denominated in bitcoin (N sats per week).
I know with exchange rate volatility, this probably wouldn't be agreeable by the employer when it is a long-term agreement (e.g., salary negotiation after an annual review), but maybe if it were a fiat amount revised each quarter-end or something like that, would at least let the employer be able to agree to that (and hedge). Same with freelancers with short-term contracts (where weeks measure in single digits or so) -- negotiating compensation denominated in bitcoin seems to be reasonable.
So, given that scenario, what is correct wording to describe "earning in bitcoin" versus just being "paid in bitcoin"?
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5 sats \ 4 replies \ @earnbitcoin OP 20 May 2022
Maybe denominated is actually the right word.
  1. I have a dollar-denominated salary, but am paid in bitcoin.
  2. You have a bitcoin-denominated salary, and earn in bitcoin.
In the first example, that's simply saying the settlement currency is bitcoin, (with the quantity of bitcoin paid calculated at the time of settlement).
In the second example, that's saying bitcoin is the unit of account used, as is bitcoin the settlement currency (with the quantity of bitcoin not varying from an earlier agreed upon rate/ or fixed amount regardless of any fluctuation in the exchange rate).
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20 sats \ 3 replies \ @EnormousPony 20 May 2022
Scenario 2 is still the worst pick in this current phase where we are transitioning from a legacy system to a new one. I, for example, have half of my income in FIAT and half in bitcoin paid directly in bitcoin at the exchange rate of the payday
This is also an interesting loophole for companies that can declare a lower salary, thus paying less taxes
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25 sats \ 0 replies \ @nerd2ninja 20 May 2022
I believe companies get a tax write-off for employee salaries as operating expendetures (OPEX). Paying a lower salary is still good for a business though (and bad for employees), just not because of tax reasons.
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0 sats \ 1 reply \ @earnbitcoin OP 20 May 2022
This is also an interesting loophole for companies that can declare a lower salary, thus paying less taxes
I'm not sure I follow. Are you referring to the bitcoin component being "off the books" (like how some pay "under the table" in cash?)
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0 sats \ 0 replies \ @earnbitcoin OP 20 May 2022
Because otherwise, even if bitcoin-denominated, the employer still needs to do compute the fiat value for determining the income tax withholding, and unemployment tax, and Social security, and such.
Oh,... I just realized something. Agreeing to pay a Bitcoin-denominated salary can really make things complicated for doing this with a W-2 employee. In addition to paying the salary the employer also has an employer paid-taxes, for social security and medicare, as well as unemployment taxes. So if the BTC/USD exchange rate rises, the employer's tax payment will rise as well. The employer not only needs to hedge for the salary but for the resultant employer-paid taxes as well!!
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20 sats \ 0 replies \ @nout 20 May 2022
Maybe "bitcoin-first salary"?
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