On January 16, 2019, BitWage announced their partnership with Simply Efficient HR, a Texas-based payroll and human resources company to enable the payment of W2 employee and payroll taxes in bitcoin or ether.
This service will be available in all U.S. states as well as Puerto Rico. This comes only weeks after Ohio became the first U.S. state to accept taxes in bitcoin.
Closing the Loop that Fiat Finished
In their statement, BitWage spoke about closing the financial loop in the bitcoin lifecycle, which involves three stages.
The first is the acquisition of bitcoin by consumers, the second is the use of the BTC to pay for goods and services, and the third is the merchant of goods and services paying their own employees in the cryptocurrency.
This is the lifecycle that fiat currency has been engaged in for centuries and by successfully closing the loop for bitcoin and other cryptocurrencies, widespread adoption is made possible according to BitWage.
The first two stages have been in motion for some time now. Cryptocurrency exchanges are many in number and consumers are able to easily buy cryptocurrency. Also, more and more merchants are accepting Cryptocurrency as a form of payment.
The problem with the last stage of the cycle revolved around many vendors who may have accepted cryptocurrency for payment but continued to pay their taxes and employees in fiat.
How this Works
BitWage, along with Simply Efficient HR, is working to solve this problem by offering companies the chance to both fund their payrolls and pay their taxes in bitcoin or ether.
On top of this, they can pay benefits, such as health insurance and HR compliance services.
The firms interested in this service will be required to sign up with BitWage and then request the HR and payroll services. The Simply Efficient HR team then takes over and offers personalized account management after the company adds the Simply Efficient HR account on Bitwage.
To fund their payroll, Simply Efficient HR will invoice the company through Bitwage for the USD needed to fund payroll taxes and employee salaries. The company can then pay the invoice in bitcoin or ether. After this is done, the taxes and workers can get paid in cryptocurrency.
This has already been beta-tested with Paxful, a peer-to-peer Bitcoin marketplace, since November 2018.