How Psychoactive Set Up Crypto Payroll For Their Employees

Date
Jul 2022
Author
Andrew Hillstead
Sheridan Jamieson
Author
Time
4 Min Read
Psychopactive Crypto Payroll

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At Psychoactive, we feel that crypto will form an integral part of the future and it's important to us that our people have the opportunity to be involved in this vision. Since January 2021, we have accepted cryptocurrencies like Bitcoin & Ethereum as payment for our services and this led us to think - if the company is getting paid in crypto, then why not pay our team in crypto too?

So, in April 2022, we switched on crypto-payroll for Psychoactive Studios employees. This means that our team members are able to use their fortnightly pay to automatically invest in cryptocurrency every pay-cycle and have this delivered to their wallet seamlessly & effortlessly. This is done through voluntary payroll deductions.

Leading up to April, we conducted internal and external research to ensure that:

  • Our team was interested in receiving cryptocurrency as part of their pay,
  • We continue to meet our responsibilities & obligations as an employer, and
  • We could incorporate payroll crypto efficiently and easily into our processes.

As is often said in crypto-circles, it’s still early but we feel that we’re on the right track with our crypto systems. If you’re interested in offering your employees the opportunity to auto-invest in cryptocurrency as part of their payroll, or would like to provide your organisation with more information, here’s a step-by-step guide to help.

Ready to get started?

  1. Gauge Interest

Before delving too deep into finding a crypto-payments platform, we recommend surveying your team for their crypto-sentiment. When we surveyed our team, we found that every member of the team was interested in investing in cryptocurrency so it was obvious that setting up payroll crypto was worthwhile for us.

  1. Research Options

We found there are two main ways to run payroll crypto. It is either through 1) using your existing cryptocurrency holdings to pay wallet-to-wallet, or 2) using a centralised platform to convert fiat currency to crypto in real-time for each purchase.

We use a US-based centralised finance (CeFi) platform. We pay USD to our account with them and, upon instruction, they convert it into each employee’s chosen cryptocurrency and transfer it to the relevant wallet. We chose this option as it was simpler for administration purposes and the CeFi platform collects & validates wallet addresses for employees - making it very easy for us to maintain.

  1. Voluntary Payroll Deduction

Once your crypto payments system is set-up, you’ll need employees to opt-in to a voluntary payroll deduction. To do this, we set-up an automated fortnightly email reminder which invites employees to opt-in/out of payroll crypto, or update their deduction preferences.

For us, this email gives clear instructions to employees on how to participate in payroll crypto, includes our chosen parameters (i.e. our employees are limited to investing a maximum of 10% of their pay), and reminds them that cryptocurrencies are volatile.

  1. Processing Payroll

Leading up to pay-day, you’ll need to run your chosen payroll crypto system alongside your traditional payroll software. The solution we chose allows us to easily reconcile the crypto payment balances with our payroll software and ensure all opted-in-employees are investing the correct amount.

Putting it all together

So you’ve read the above, and you’re wondering what this looks like in practice? Here’s the nitty-gritty on how our system works:

  • We send out the automated voluntary deduction email 5 days before pay-day. 
  • When employees opt in or change their preferences, we save a copy of the email and update our records accordingly.
  • If we need to, we transfer funds to the CeFi platform. We tend to keep a small float here to ensure we don’t get held up by delayed fiat payments. This float is held in USD.
  • When processing payroll, we ensure our employees are each set-up with the correct voluntary deduction in our payroll software. Simultaneously, we set up the payroll crypto in the CeFi platform and ensure the total of the voluntary deductions equals the total amount being invested.
  • Then, we make our payroll bank transfers based on the net amount after voluntary deductions and authorise the crypto payments.

We had to put a lot of work into researching these processes & the platforms we’ve used to make this a smooth experience. So, we’ve prepared this document for others to benefit from our experience & learnings since we began the implementation of payroll crypto. 

For us, the time & effort has all been worth it so far - it’s been very rewarding to witness the uptake and we see this as a fantastic opportunity for our team members to invest in a new asset class and create positive long-term financial habits.

By creating exposure to new financial & business models based on cryptocurrencies, Web3, NFTs, and the metaverse, we feel we’re setting-up our people to benefit from being early adopters. In turn, this will open up new opportunities in life & work and provide them with great experience & education.

One final note

We’ve deliberately steered clear of recommending any specific platforms in this article. Everyone’s set-up is different and what works for us, may or may not work for you. If you’d like to find out more about the specific details of our set-up, please contact us.

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