5 sats \ 4 replies \ @earnbitcoin OP 20 May 2022 \ on: Ask SN: How to describe "earning in bitcoin" versus simply being "paid in bitcoin"? bitcoin
Maybe denominated is actually the right word.
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I have a dollar-denominated salary, but am paid in bitcoin.
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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).
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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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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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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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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