Bitcoin as Salary in Austria: Which Taxes Arise?

Receiving Bitcoin as salary: how Austria taxes income and later price gains

Where an Austrian employee is paid wholly or partly in Bitcoin, taxation is not simply deferred until the coins are sold later. The Bitcoin payment is first of all consideration for the work performed. Benefits in kind from an employment relationship count in principle among taxable income in Austria and have to be valued in money. Two separate tax stages can therefore arise: first the taxation of the wage, and later, where applicable, the taxation of a Bitcoin price gain.

Bitcoin salary is recorded at its value on receipt

If an employee receives a corresponding amount of Bitcoin instead of €2,000, the euro value of the coins received is in principle to be recorded as employment income. This value feeds into the ordinary payroll accounting. On the employee side, wage tax and social security contributions in particular can therefore become relevant.

The value on receipt becomes the tax cost basis

At the same time the employee acquires a Bitcoin holding.

Simplified example:

• Bitcoin salary on receipt: €2,000
• the corresponding BTC amount is transferred to the employee

The €2,000 is initially treated as wage income. For the later taxation of the crypto assets it forms, in principle, the tax cost basis of the coins received. If their value subsequently rises to, say, €3,000 and they are sold, an additional Bitcoin gain of €1,000 arises in principle. For private taxable crypto gains the special tax rate of 27.5 percent applies in principle.

No double taxation of the same amount

The original salary value is not taxed a second time as a Bitcoin gain.

Example:

• Bitcoin at the time of salary payment: €2,000
• later sale: €3,000

First level: €2,000 wage income
Second level: €1,000 increase in the value of Bitcoin

The separation for tax purposes prevents the same value from being recorded twice as a gain.

A price loss can also become relevant for tax

If the value of Bitcoin falls after receipt, a capital loss can arise on a later realization for tax purposes.

Example:

• value on receipt: €2,000
• later sale: €1,500
• crypto loss: €500

This private capital loss can in principle be offset against certain other investment income within the framework of the Austrian loss offsetting rules.

The employer must document the euro value

For employers and employees, the value of Bitcoin at the actual time of receipt is therefore decisive.

The following in particular should be documented:

• day and time of the transfer,
• quantity of BTC,
• euro rate applied,
• source of the rate,
• wallet address,
• transaction ID,
• the entry in the payroll statement.

This keeps it traceable which amount has already been taxed as wage income and from which value a later capital gain begins.

Conclusion

Bitcoin paid as salary does not become relevant for tax in Austria only on a later sale. The euro value of the coins received is in principle taxable employment income from the outset. If the Bitcoin price then rises further, a taxable capital gain can arise on top. For this later private Bitcoin gain the tax rate of 27.5 percent applies in principle.