Reported by Coindesk, Bitwage CEO Jonathan Chester confirmed their partnership with a payroll company to allow more firms to pay their salaried employees in crypto. That means more U.S employers can now fund payroll, payroll taxes and benefits with bitcoin or ethereum.
Currently having 45 active company clients, Bitwage partnered with Simply Efficient HR, a professional employer organization (PEO) Texas-based, expecting to expand the service beyond Bitwage’s current user base of 20,000.
Letting companies pay salaried employees in crypto, rather than just contractors is one of the most important features of the new service. On that note, the tax portion is converted into dollars and paid out compliant with current tax systems in the U.S.
“Previously you could pay contractors, but with W2 employees you would have to figure out how to fulfill your fiat obligations to the government regarding the tax processing,” said Chester.
Hayel Abbassi, controller of a peer-to-peer exchange company called Paxful, who has been using the product in beta since November complimented Bitwage on minimizing the gap between bitcoin and the traditional finance system. He said: “Paxful simply sends bitcoin to an address, and our employees receive net checks with the proper federal and state taxes withheld.”
About 50% of Bitwage’s existing customers are crypto-related and the other 50% use the service as solution for cross-border payment, according to Chester. He says the new product could benefit companies sitting on crypto reserves.
“If you work at a company where you do have banking issues, it’s pretty easy to see the value that cryptocurrency brings,” Chester added.
Founded in 2014, Bitwage is a company leveraging latest technology to provide HR and Payroll services for companies. The company raised $1 million in venture capital early on, including $760,000 from Draper Associates in 2015 and is looking for expansion capital.