How To Pay Employees and Contractors in USDC

Benefits of USDC Payments

USDC, a dollar-pegged stablecoin, offers a reliable and efficient solution for payroll, combining the benefits of cryptocurrency with the stability of fiat currency. Its main advantages include:

• Stability and Security: With its value closely tied to the US dollar, USDC provides a predictable and secure way to handle payments, building trust and satisfaction among employees and contractors.
• Global Payments Made Easy: USDC enables quick and cost-effective international transactions, avoiding the high fees and delays of traditional banking, and facilitates better financial planning due to its stable value.
• Transparency and Compliance: Transactions made with USDC are recorded on the blockchain, ensuring transparency and ease of auditing for regulatory compliance.
• Efficiency Across Borders: USDC simplifies global payments, offering a consistent and stable means of compensation that sidesteps currency fluctuation issues and integrates seamlessly with digital economy platforms.
• Speedy Transactions: Payments with USDC are nearly instantaneous, ensuring quick access to funds and helping businesses maintain operational efficiency without being hindered by banking hours or currency conversion delays.

By using platforms like Rise, companies can automate and speed up the transfer of USDC to their international workforce, streamlining payroll processes, enhancing compliance and security, and boosting overall satisfaction. 

This approach not only simplifies global payroll management but also aligns with the evolving digital infrastructure of the Web3 era, marking USDC as a crucial tool for modern, efficient, and transparent financial operations.

Why Do Global Contractors Want to Get Paid in USDC?

In 2024, the preference among global contractors for payments in USDC (USD Coin) stems from its ability to marry the benefits of digital currency with the stability of the US dollar. 

As a stablecoin, USDC offers a pegged value to the USD, ensuring that each coin maintains a close value to one US dollar, which addresses various financial and operational concerns for contractors:

Stability and Protection from Inflation

• Fiat-backed Security: USDC's value is directly tied to the US dollar, providing a stable medium of exchange that is insulated from the volatile swings commonly associated with cryptocurrencies. This stability is particularly attractive for contractors looking to protect their earnings from the unpredictability inherent in other digital assets.
• Inflation Hedge: For contractors living in countries with volatile currencies or high inflation, receiving payments in USDC can safeguard the value of their income. Unlike local currencies that may depreciate rapidly, USDC's tie to the US dollar offers a more reliable store of value, preserving purchasing power over time.

Less Delays When Receiving Earnings

• Swift Transactions: Leveraging blockchain technology, USDC transactions can be completed quickly, often within minutes. This efficiency dramatically reduces the waiting period for funds to clear, unlike traditional bank transfers which can take several days, especially for international transactions.
• Operational 24/7: Blockchain networks do not observe traditional banking hours or holidays, allowing USDC transactions to be processed at any time. This round-the-clock availability ensures that contractors can receive their payments without delay, facilitating better financial planning and liquidity.

Ease of Access and Inclusivity

• Universal Access: USDC can be accessed globally, requiring just an internet connection and a digital wallet. This level of accessibility makes it an ideal payment method for contractors in remote or underserved areas where traditional banking services may be limited or non-existent.
• Promoting Financial Inclusion: By enabling payments in USDC, businesses can tap into a broader talent pool, including those who may not have access to traditional banking services. This inclusivity breaks down barriers to employment and allows for a more diverse workforce, offering opportunities to talented individuals regardless of their geographic location or economic status.

For global contractors, USDC presents a compelling option that combines the advantages of cryptocurrency transactions with the stability of the US dollar, ensuring their hard-earned money retains its value against inflation and is available promptly and reliably, irrespective of where in the world they may be working.

How to Set Up USDC Payroll with Rise

1. Create a Business Account 

Visit the Riseworks.io and sign up for a business account by providing basic company information, such as your business name, address, and contact details. 

After registration, you'll be prompted to complete a verification process to ensure the security and legality of your account, which may involve submitting additional documents or information about your business.

2. Invite and Onboard Your Contractors Compliantly

Next, you’ll invite your contractors to join the Rise platform simply by sending them an email.

From there, your contractors will be onboarded quickly and compliantly by going through KYC checks and identity verification.

They will be given a unique Rise ID, a digital wallet address, and will be able to set up their preferred payment methods for withdrawals.

3. Fund Your Payroll

Rise gives employers the unique ability to fund payroll in either US dollars or USDC stablecoin, so that global employers are not limited by traditional banking systems.

If you choose to fund in USDC, you can use any of our integration partners including Arbitrum, Coinbase, Uniswap, Ethereum, Metamask, Avalanche, Gnosis Safe, Optimism, Polygon, MEW, and Torus.

Once the funds are available, you can easily allocate them to your payroll needs within the Rise platform, setting up automated payments in either fiat or cryptocurrency according to your payroll setup.

4. Set Up Payment Schedules

Within the Rise platform, you can establish payment schedules that fit your business operations, whether that's weekly, bi-weekly, monthly, or custom intervals. 

This flexibility allows you to align payroll disbursements with your company's cash flow and contractor expectations. 

Moreover, Rise offers the capability to automate these payments, ensuring that your contractors receive their earnings on time, every time, without manual intervention, thus reducing administrative workload and enhancing payment accuracy.

5. Contractors Withdraw in Their Preferred Currency (Fiat or Crypto)

Contractors have the freedom to withdraw their earnings in their preferred currency, whether it's fiat or a variety of cryptocurrencies, directly from their Rise digital wallet. 

This feature supports the diverse needs of a global workforce, enabling seamless conversion and transfer of funds to their personal accounts without the need for intermediaries.

And that’s all there is to it. You can get started now by visiting Rise and scheduling a demo.

Compliance and Tax Considerations

Navigating the intricacies of tax laws and compliance regulations is fundamental when remunerating employees and contractors in USDC.

• Understand and adhere to IRS guidelines for cryptocurrency transactions as specified in Notice 2014-21.
• Classify workers accurately as either employees or independent contractors to determine appropriate tax treatment.
• Document and promptly report all payments in USDC for both employees and contractors on tax forms, such as W-2 or 1099.
• Maintain compliance with AML/KYC regulations to ensure legitimacy in all transactions.
• Consider state tax obligations, as they can vary widely and complicate the reporting process.
• Stay informed about international tax liabilities for contractors residing outside the United States.
• Leverage dedicated software solutions that streamline compliance and tax reporting specific to cryptocurrency payrolls.

The obligation to correctly determine tax withholdings and filings cannot be overstated.

Platforms like Rise simplify all of this by automating compliance and tax reporting, ensuring your processes remain up-to-date and within the legal framework.

Automating Payouts and Reporting

Rise's automation significantly simplifies payroll processing, reporting, and compliance, especially in the complex domain of crypto payroll. Key benefits include:

• Streamlined Compliance and Taxation: Rise automates the intricate processes of taxation and compliance, ensuring accurate and timely actions that help businesses operate smoothly and with confidence.
• Reduced Operational Costs: Automation of payouts, particularly in the crypto realm, cuts down operational overhead, making mass payments across borders quick and straightforward.
• Efficiency in Payroll Management: Rise facilitates effortless disbursement of USDC payments, maintaining efficiency without sacrificing compliance with reporting requirements.
• Simplified Regulatory Adherence: As businesses expand globally, Rise's automated services lighten the load of staying compliant with diverse international tax laws and regulations, crucial in the fast-evolving crypto environment.

In essence, Rise's automation capabilities offer a robust solution for navigating the challenges of crypto payroll, ensuring operational efficiency, compliance ease, and financial accuracy.

Start Paying Contractors in USDC

Start paying your global contractors in USDC by scheduling a demo with Rise today to see just how easy we can make your global crypto payroll.