Georgia has become a popular base for global startups thanks to low taxes, fast business registration, crypto-friendly policies, a simple Individual Entrepreneur taxation model, and straightforward employer hiring rules.As more founders move their teams to Tbilisi, Batumi, or build remote teams using Employer of Record Georgia, one question keeps coming up.

Should we pay our people in fiat or in crypto.

Startups want speed. Contractors want flexibility. Investors want compliance. And Georgian banks want transparency under Bank of Georgia KYC and National Bank of Georgia AML rules.

Crypto payroll is growing globally. But can it work in Georgia without putting your business at risk.This guide breaks down the real differences between crypto payroll and fiat payroll in Georgia, including cost, speed, compliance, tax rules, and bank requirements. It uses real examples and integrates all key terms you need for SEO like georgia crypto tax, georgia country taxes, vasp license georgia, georgian banks, georgia country tax rate, employer of record in georgia, and more.

The Basics. What Counts as Crypto Payroll in Georgia

Crypto payroll means paying employees or contractors using Bitcoin, Ethereum, USDT, or any other virtual asset. In Georgia it is fully legal. But it must follow tax and employment rules.

Key points.

Crypto is a digital asset, not legal tender.
Employees can receive it only if they agree in their contract.
Crypto payroll is taxed the same way as fiat payroll.
Contractors must declare crypto income as turnover if registered as an Individual Entrepreneur.
Businesses may need a VASP license Georgia if they handle client crypto or wallet custody.

The Basics. How Fiat Payroll Works for Georgian Startups

Fiat payroll is traditional salary in GEL transferred through Georgian banks, typically Bank of Georgia, TBC Bank, Liberty Bank, or BasisBank.

Employers must follow:

20 percent personal income tax
2 percent pension contributions for most worker categories
Standard monthly reporting to Revenue Service Georgia
Georgian payroll rules if using an internal HR structure
Or use an Employer of Record Georgia to outsource compliance

Fiat payroll is simple and predictable, but it comes with higher operational costs when paying international teams.

Cost Comparison. Crypto Payroll vs Fiat Payroll

Cost of Paying in Crypto

Crypto payroll can significantly reduce transfer costs for global teams.

Cross border transfers are instant and cost a fraction of SWIFT fees.
No currency conversion spreads when paying in USDT or USDC.
No international bank transfer fees.
No delays from correspondent banks.
Ideal for contractors in countries where banking is slow or unstable.

However, crypto payroll introduces compliance requirements.

Payroll value must be converted to GEL using the Revenue Service rate.
Employers must record exchange rate calculations.
Some businesses need a VASP license Georgia if they manage wallets or custody assets.
Employees may face volatility unless paid in stablecoins.

Cost of Paying in Fiat

Fiat payroll is simpler from a compliance perspective but more expensive operationally.

Banks charge for international transfers.
Cross border payments may take days.
Currency spreads add cost when paying foreign workers.
Payroll processing takes more internal time.
Contractors outside Georgia may receive payment with delays.

Summary Table

Factor	Crypto Payroll	Fiat Payroll
Transfer fees	Very low	Medium to high
Speed	Instant	1 to 5 days
Volatility	High unless stablecoins	None
Compliance	Requires clean records	Simple and predictable
Banking	Requires clear SOCF	Standard KYC only
Tax reporting	1 percent for IEs	20 percent payroll + pension
Global reach	Excellent	Slower for international teams

Speed Comparison. Crypto vs Fiat Payroll

Crypto Payroll Speed

Crypto payroll is extremely fast.

USDT or USDC on TRC20 or ERC20 arrives within seconds.
Time zones do not matter.
No weekends or holidays.
No SWIFT delays.

For fast growing startups with distributed teams, this is a major advantage.

Fiat Payroll Speed

Fiat is slower.

Transfers to Europe can take 1 to 2 business days.
Transfers to the United States may take 3 to 5 business days.
Currency conversion adds processing time.
Banks may request invoices or contracts.

Crypto wins on speed. But speed is only one side of the equation.

Compliance Risks. Where Crypto Payroll Can Go Wrong in Georgia

Crypto payroll can be legal and efficient in Georgia. But only if handled correctly. Here are the biggest risks startups face.

Risk 1. Misunderstanding Taxation

Crypto income is not tax free for payroll.It must be taxed exactly like fiat income.

Employees. 20 percent income tax.
Contractors registered as Individual Entrepreneurs. 1 percent tax under georgia small business status 1 percent tax 500,000 gel 2025 when paid by foreign clients.
Contractors without IE status. Full income tax applies.

Crypto itself is not taxed. The salary value is.

Risk 2. No SOCF Documentation

Crypto payroll requires strong documentation.

Wallet history
Exchange logs
Contract specifying crypto payment
Proof of service
Matching turnover declarations
Gel conversion records

Banks in Georgia may block cash outs if SOCF is incomplete.

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Risk 3. Operating Without a License

If your business handles crypto for workers or clients, you may unintentionally fall into regulated activity.

You may need a VASP license Georgia if you:

Hold crypto for employees
Convert crypto to fiat for them
Act as an intermediary
Operate a payment platform
Provide custody services

Startups often miss this, exposing themselves to penalties.

Compliance Risks With Fiat Payroll

Fiat payroll is simpler but also comes with risks if you hire internationally.

Misclassification of contractors
Double taxation issues
Incorrect reporting to Revenue Service
Failure to register employees properly
Cross border payroll without proper contracts
Not using an Employer of Record in Georgia when hiring foreign workers in the country

For risk free hiring, startups often use Gegidze’s Employer of Record Georgia service to avoid compliance problems.

Crypto Payroll and Tax Rules in Georgia

For Employees Paid in Crypto

Crypto salary is taxed as GEL salary.

Employer calculates salary in GEL
Uses daily exchange rate
Withholds 20 percent tax
Pays pension contributions if applicable
Submits monthly payroll report

For Contractors Paid in Crypto

If a contractor works with foreign clients and registers as an IE, crypto income is taxed at:

1 percent of turnover up to 500,000 GEL
Using Revenue Service exchange rate on payment date

This is one of the most attractive tax models in the world for remote workers.

Banking Considerations. Cashing Out Crypto in Georgia

Georgian banks are crypto friendly but require:

SOCF
Invoices
Contracts
Exchange proof
Wallet screenshots

Without this, banks may freeze your transfer.

When Crypto Payroll Makes Sense for Startups

Crypto payroll is an excellent choice for startups when:

The team is global
Workers are contractors, not employees
Payments are large or frequent
Workers want crypto payments
Startups want low transfer costs
Fast currency movement is needed
Startups operate in Web3, DeFi, gaming or iGaming
No need for a VASP license

When Fiat Payroll Makes More Sense

Fiat payroll is better when:

You have employees inside Georgia
Workers need official local salary history
Pension contributions are required
Workers do not want crypto
You need simple bank compliance
You are hiring through an Employer of Record structure

If you want a payroll system that works for your Georgian team and stays compliant with tax and banking rules, book a free consultation with Gegidze.

We help startups decide between crypto and fiat payroll, structure payments legally, and avoid costly mistakes while taking advantage of Georgia’s low tax environment.

Frequently asked questions (FAQs)

Can startups in Georgia legally pay employees and contractors in cryptocurrency?

Yes. Startups can pay in crypto as long as workers agree in their contracts and the company calculates the GEL equivalent for tax reporting. Employees pay 20 percent income tax. Contractors registered as Individual Entrepreneurs may pay 1 percent under the Georgia small business status 1 percent tax 500,000 gel 2025 if they work with foreign clients. Crypto payroll is legal, but income must be declared correctly to the Revenue Service Georgia.

Do I need a VASP license to run crypto payroll for my team?

Not usually. A VASP license Georgia is required only if your startup holds crypto on behalf of workers, converts crypto to fiat for them, operates custody services, or manages team wallets. If you are simply sending payments directly to employee or contractor wallets, no crypto license Georgia is required.

Will Georgian banks accept funds that originate from crypto payroll?

Yes. Banks in Georgia, including Bank of Georgia and TBC Bank, accept fiat withdrawals from crypto as long as the company and workers provide proper SOCF documentation. This includes invoices, contracts, wallet proofs, and exchange transaction history. Without SOCF, banks may delay or question the transfer.