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'Employment Income'
With increasing inflation and general negative sentiment toward fiat currencies, many employees are losing faith in fiat, choosing to be paid at least partly in cryptocurrency.
Most will choose to be paid in stablecoins, such as USDT, to avoid volatility and exchange their assets into 'blue-chip' cryptocurrencies such as Bitcoin or Ethereum, believing them to be their path to financial freedom.
You may ask - 'If an employee receives half of their wages in cryptocurrency, will SARS know about their earnings?'
For this reason, the tax treatment of employment income being paid in crypto assets can begin to get tricky.
All income through employment must be taxed. Therefore, we can assume SARS expects you to declare that any crypto received from your employer will be taxed accordingly.
Employees have earned their crypto assets by working (mental or physical labour), so they will be taxed based on their income tax bracket.
Junior gets paid R400,000 yearly at his employment and was offered to receive 10% of his employment income in cryptocurrency.
Now receiving R40,000 worth of stablecoins every year, Junior must declare his cryptocurrency 'earnings' or income through form ITR12 when he declares.
He would continue to pay the same income tax rate on his crypto income.
Last modified 1yr ago