What happens if you get paid a salary in Bitcoin

The market for Bitcoin and cryptocurrency is growing rapidly, with currency values climbing in 2017.

As cryptocurrency is adopted as a payment method by an increasing number of companies, the question remains as to how South Africa’s tax laws apply to Bitcoin earnings.

Specifically, if a South African earns a salary in Bitcoin, how are they taxed?

MyBroadband spoke to experts in the field to find out how Bitcoin is controlled in South Africa.

Simon Dingle

Simon Dingle

Broadcaster and blockchain expert Simon Dingle said that when exchanging Bitcoin for rand, taxes apply as they would for any asset disposal.

However, the rules are not clearly defined for South Africans who are paid their salary in Bitcoin.

Dingle said there “aren’t any clear answers” regarding how salaries are taxed if they were paid in Bitcoin.

He said it is unclear whether South Africans are taxed on the value of their salary at the time of payment to their Bitcoin wallet, or when they exchange their Bitcoin to rand.

“The SARB (and therefore SARS) does not consider Bitcoin to be currency and would not support companies using it to pay salaries,” said Dingle.

“That said, it also isn’t illegal. The onus is on the taxpayer to apply the law to their income.”

Dingle said cryptocurrencies like Bitcoin are a difficult issue for regulatory authorities, as there is no practical way of policing their use.


Luno logo

South African Bitcoin exchange Luno, which has high compliance standards with local and international laws, said Bitcoin recipients should consult with a registered tax professional on the matter.

“​From what I understand, you might be able to arrange for your salary to be paid in instruments other than your local currency, such as equity in a company, property, produce, and so on,” said Luno Head of Growth Werner van Rooyen.

“Doing so will still come with a tax burden, and probably a much higher administrative burden.”

Van Rooyen said it is currently easier to take your after-tax salary and use it to buy Bitcoin, rather than ​get paid in Bitcoin.

However, there are companies such as Bitwage that allow international freelancers and wage earners to be paid in Bitcoin.

Luno believes that cryptocurrencies should be regulated to protect consumers from non-compliant operators and bring more attention to the cryptocurrency industry.



The South African Revenue Service said transactions or speculation in Bitcoin are subject to the general principles of South African tax law and are taxed accordingly.

This applies to income generated from trading cryptocurrency and being paid a salary in Bitcoin.

SARS did not specify the tax requirements for specific Bitcoin-to-rand transactions and said it does not accept payment in Bitcoin. SARS referred MyBroadband to the Reserve Bank for an update on the legal status of Bitcoin in South Africa.

When MyBroadband asked the South African Reserve Bank about Bitcoin tax and regulation in South Africa, it referred us to its position paper published in 2014.

The South African Reserve Bank’s paper on virtual currencies distinguishes between E-money and cryptocurrency, with E-money “redeemable for physical cash or a deposit into a bank account on demand”.

According to the paper, cryptocurrencies are not defined as legal tender and “should not be used as payment for the discharge of any obligation in a manner that suggests they are perfect substitute of legal tender”.

Now read: Bitcoin and cryptocurrency – South Africa vs the World

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What happens if you get paid a salary in Bitcoin