Cryptoassets, such as bitcoin, are an increasingly popular form of payment. HMRC refers to exchange tokens, utility tokens, security tokens, and stablecoins as types of cryptoassets. Although Cryptoassets are not subject to any special UK tax rules, wages received in the form of cryptoassets constitute money’s worth and are therefore subject to income tax and National Insurance contributions. For the purposes of PAYE, HMRC’s view is that exchange tokens like Bitcoin will generally be readily convertible assets. As a result, employers should value Cryptoassets paid to employees using their best estimate and then subject it to the appropriate PAYE deductions.

The National Minimum Wage Regulations 2015 SI 2015/621, regulation 10(f) provides that benefits in kind provided to the worker, whether or not a monetary value is attached to the benefit, other than living accommodation, do not form part of a workers’ remuneration for minimum wage purposes. Further, regulation 10(g) provides that a voucher, stamp or similar document capable of being exchanged for money, goods or services (or for any combination of those things) also does not form part of a workers’ remuneration for minimum wage purposes.

Therefore, a worker who wishes to receive their salary in crypto may do so provided national minimum wage requirements are met. However, they will still be liable to the levels of income tax and national insurance contributions for the monetary value the receive.