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Ever since the industrial revolution, one of life’s most tangible measures of a wide range of social and economic situation is gross domestic product per capita, and more specifically, salary paid to a national workforce.
What if, however, the traditional means of remuneration ceased to exist?
Canada, a nation which whose economy was largely unaffected by the global financial crisis five years ago, and whose resources and output are so vast that there are regular drives by the government to incentivize skilled immigration from across the globe in order that new arrivals can obtain gainful employment and assist in contributing to Canada’s success.
It has emerged today that many employees in Canada, despite the nation’s relative stability and prosperity, are requesting that their salaries are paid in Bitcoin rather than good, old fashioned Canadian dollars.
According to Wagepoint, a payroll company based in Waterloo, Ontario which began providing a facility to pay staff in virtual currency in November last year, many employees have begun requesting that they are remunerated in Bitcoin.
Wagepoint commenced the service as an experimental project, and, according to Shrad Rao, the company’s CEO, it was anticipated that absolutely no interest in this method of receiving salary would ensue.
“When we started off, we didn’t even think we’ll get one,” he said over the phone from New York, where Wagepoint has another office. What’s interesting is that we’ve actually had customers come to us because of the Bitcoin integration, which we were not expecting at all” Mr. Rao explained to CTV.
Mr. Rao further explained that the vast majority of companies which have taken to remunerating employees in Bitcoin thus far have been technology companies, whose employees have a great interest in new and emerging technological innovations and tend to be less risk averse, an interesting perspective in otherwise extremely conservative Canada.
Canada Revenue Agency spokesman Noel Carisse has stated that paying employees in Bitcoin means paying them in goods, designating it, according to Mr. Carisse, as “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 explained Mr. Carisse in an email to CTV.
“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” he concluded.
For Wagepoint, however, it works differently. Mr. Rao has confirmed that as far as taxation is concerned, employees are still being paid with Canadian dollars on paper. Employees can receive all or part of their wages in Bitcoin, and taxes are taken from the Canadian dollar salary before the remainder is converted.
“Really, it’s what you do with your personal income at that point,” he said. “If you bought a boat with it or invest in Bitcoin, I’m not sure that’s very different from each other.”
Cissy Pau of the Vancouver-based Clear HR Consulting, which deals with small businesses, predicts being paid in virtual currency will not expand beyond the tech world because there are currently too few places to spend it. “Tech companies, I can see that,” she stated to CTV yesterday. “I just can’t see that in, say, Canada Post, a more traditional-type company with more traditional-type workers. I would suspect that people will be highly skeptical.”
On this basis, currently it is not quite possible to completely avoid the use of fiat currency, however it is entirely possible to receive net salary in Bitcoin and therefore, for those bold enough, to avoid utilizing a traditional bank account, and gain potential global buying power with no conversion fees, and no bank charges or restrictions.
Should this pioneering effort make its way further into the mainstream, the well worn adage that cash is King may be as synonymous with times gone by as piece work and the wage packet.