New Zealand has taken another step toward digitalising the workplace: starting 1 September, employers will be able to remunerate workers using cryptocurrency.
The Inland Revenue Department has permitted companies to pay out salaries and wages through blockchain-based currencies such as Bitcoin. This makes New Zealand the first country in the world to support crypto-salaries as an option.
The revenue agency announced it would tax crypto-salaries after it recognised a number of similarities between digital currencies and money: characteristics such as being ‘divisible’ and ‘hard to counterfeit,’ the agency said.
The value of the crypto-asset should be pegged to one or more fiat currencies, the agency ruled. Crypto-salaries must also be easily convertible into fiat currency (on an exchange).
Taxes will be deducted following the pay-as-you-earn scheme. Crypto-salaries, however, need to be disbursed as regular and fixed remuneration for work rendered by employees. Self-employed taxpayers will not be covered by the new option.
The adoption of cryptocurrency as a medium of payment for salaries and wages represents a remarkable shift for New Zealand into the Industry 4.0 era.