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Bitwage is working with a payroll company to give more companies the ability to pay their workers in cryptocurrency.
Exclusive to CoinDesk, Bitwage CEO Jonathan Chester says the partnership will allow more US employers to fund payroll, payroll taxes and benefits with bitcoin or ether.
"This is a lifeline for companies that pay their people compliantly," Chester told CoinDesk.
Bitwage currently has 45 active corporate customers. The partnership with Simply Efficient HR, a professional employers' organization (PEO) based in Texas, aims to expand the service beyond the current 20,000 Bitwage user base.
It is important to stress that the new service allows companies to pay employees in encryption rather than just contractors. The tax portion is converted into dollars and paid in accordance with current tax systems in the United States.
"You could pay the contractors first, but with W2 employees you should understand how to meet your legal obligations to the government about tax treatment," Chester said.
Paxful, a peer-to-peer exchange company, has been using the beta product since November.
"Bitwage bridges the gap between bitcoin and the traditional financial system," said Hayel Abbassi, Paxful's controller. "Paxful simply sends bitcoins to an address, and our employees receive net checks with the required federal and state taxes withheld."
Half of Bitwage's existing customers are encrypted and use the service halfway as a cross-border payment solution, according to Chester. He says that the new product could benefit companies that sit on crypts reserves.
"If you work in a company where you have banking problems, it's pretty easy to see the value that cryptocurrency brings," Chester told CoinDesk.
Founded in 2014, Bitwage currently employs 11 full-time employees, some of whom get up to 15 percent of their cryptic salaries, Chester said. The company raised $ 1 million in risk capital in the early stages, including $ 760,000 from Draper Associates in 2015. In 2018, Draper also invested $ 1.25 million in OpenNode, a competitive bitcoin payments startup operating on the network. of lightning.
The bitwage is processing $ 2.5 million in monthly volume and is funded by revenue, Chester said, adding that the company is currently looking for expansion capital.
Paycheck image via Shutterstock
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