Employees vs contractors: what’s supported and what’s different?

Employees (W2 employees receiving crypto)

Best for: Companies that want to offer crypto payouts to their W2 employees as part of their compensation.

How it usually works

• Your company continues using your existing payroll provider to handle tax withholdings and deductions.
  
  
• Bitwage is used to deliver the portion of pay that employees choose to receive via Bitwage (for example, as crypto or a split allocation).
  
  

Important: Bitwage does not do tax deductions. You’ll keep your current payroll system for that.

What employees can do

• Choose how much they want deducted/allocated from their paycheck (their payout preferences)
  
  
• Set up receiving options (local currency, crypto, or split)
  
  
• Submit/manage expenses (if your company uses Expenses)
  
  

Contractors (freelancers, vendors, global workers)

Best for: Companies paying global contractors such as freelancers and vendors.

How it usually works

Contractors can be paid in two common ways:

1. Invoice-based payments
   
   
   • Contractors create invoices inside Bitwage
     
     
   • Your company reviews and pays the invoice through the platform
     
     
2. Company-created payments (payroll-style)
   
   
   • Your company creates a regular payment/payroll run
     
     
   • Contractors are included as recipients and get paid through Bitwage
     
     

What contractors can do

• Create and send invoices (if using invoicing)
  
  
• Set up receiving options (bank, crypto, or split)
  
  
• Get paid through invoices or company-created payments
  
  

Quick comparison

Employees

• Typically W2 workers
  
  
• Crypto is offered as an optional payout/allocation from paycheck
  
  
• Uses another payroll system for tax deductions
  
  
• Can use Expenses
  
  

Contractors

• Typically freelancers/vendors/global workers
  
  
• Paid via invoices and/or company-created payments
  
  
• No payroll tax withholding handled by Bitwage
  
  
• Focused on international contractor payments