Cryptocurrency Compensation, The New Frontier of Payments

The advent of cryptocurrencies in the workplace is revolutionizing traditional perspectives by introducing an alternative mode of compensation: payment in virtual coins. However, this phenomenon raises crucial legal and tax-related questions.


Legislative Changes and Regulations in 2023

Significant developments have taken place in the tax regulations governing cryptocurrencies, thanks to the 2023 Budget Law and the Markets in Crypto-Assets Regulation (MiCA). These regulatory updates are shedding light on a debated subject, outlining specific guidelines for taxpayers engaged in the holding and exchange of virtual currencies. Nonetheless, many unresolved issues persist, including the critical matter of paying salaries in cryptocurrencies.

Cryptocurrency Compensation: Legitimacy and Taxation in Italy

While only a limited number of companies currently choose to disburse a portion of salaries in cryptocurrencies, it is imperative to examine the legal aspects of this practice in the Italian context and, if permitted, understand the associated tax regime. In Italy, labor compensation is primarily conducted in the national currency, the Euro. However, the emergence of cryptocurrencies opens the door to considering alternative payment options.

In Italy, cryptocurrencies are classified as an asset and have recently acquired a clear definition: “digital representations of value or transferable and electronically storable rights via distributed ledger technology or similar.” Consequently, profits derived from compensated work in cryptocurrencies may be subject to taxation, both in terms of income taxes and capital gains taxes.

Income from Labor Paid in Cryptocurrencies: Tax Impact and Relevant Regulations

Income from labor paid in cryptocurrencies constitutes an integral part of the taxable base of the Personal Income Tax (Irpef) for the worker, qualifying as employment income, and is subject to withholding at the applicable marginal rate. To calculate this taxable base, the market value of cryptocurrencies at the time of receipt of compensation is considered.

However, if cryptocurrencies are not immediately converted into traditional currency, changes in value may arise, generating capital gains or losses.

In accordance with the new tax provisions, proceeds from the sale, reimbursement, exchange, or onerous holding of cryptocurrencies are classified as miscellaneous financial income and must be reported annually in the income tax return. This implies that, in addition to the Irpef paid on labor income, if the sale of received cryptocurrencies for work results in a capital gain exceeding €2,000, a tax rate of 26% will be applied.

The received compensation should be reported:

  • In section RT of the Personal Income Tax Return, where gains and losses from disposals of participations referred to in Articles 67, paragraph 1, letter Da) -bis to Da) -quinques of the TUIR must be declared.
  • In section RW of the income tax return, even if the holdings do not exceed €15,000; this necessitates the valuation of cryptocurrencies in Euro at the time of reporting and the calculation of taxes due based on actual profits realized, considering that RW reflects the “income-producing potential.”


In conclusion, paying workers’ salaries in cryptocurrencies represents an emerging trend that promises to bring significant changes to the world of work and finance. While it offers advantages such as transaction speed and potential cost savings, it also entails challenges and uncertainties related to cryptocurrency volatility and the need for regulation.

It is essential to note that this practice is not yet widely adopted, and reactions vary significantly. Some workers view cryptocurrencies as an opportunity to diversify their financial portfolios, while others are concerned about their stability and security. Companies, on the other hand, must address compliance and cryptocurrency value fluctuations.

Ultimately, paying salaries in cryptocurrencies is a trend to watch in terms of evolution in the coming years; at present, it remains an evolving field that requires a thorough assessment of risks and opportunities. It is crucial that this transition occurs responsibly and in a regulated manner to ensure the financial security and economic stability of all workers.


LDP provides Tax, Law and payroll  scalable and customised services and solutions. LDP Professional have also matured a significant expertise in  M&A, Corporate Finance, Transfer Price, Global Mobility Consultancy and Process Automation. 

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