Paying Employees in Crypto in Georgia: Payroll and Legal Insights
- Tinatin Tolordava
- Nov 21
- 5 min read
Table of contents:
Why Crypto Payroll Is a Hot Topic
For global companies, paying teams in crypto is no longer a novelty. Startups, DAOs, and even established firms use Bitcoin, Ethereum, or stablecoins to compensate developers, marketers, and community managers. The appeal is clear: fast, borderless payments without banking bottlenecks.
But here’s the challenge. In most jurisdictions, crypto payroll raises compliance red flags.
Tax authorities either don’t recognize direct crypto salaries or impose high taxes with complex reporting. That’s why more businesses are turning to Georgia, a country with one of the clearest legal frameworks for crypto payments, low taxes, and fast payroll solutions.
Is It Legal to Pay Employees in Crypto in Georgia?
Yes, but there’s a nuance.
Crypto in Georgia is fully legal, but it is not legal tender. The Georgian Lari (GEL) is the only recognized salary currency.
This means you cannot write an employment contract that says, “Salary: 0.1 BTC.”
Instead, the correct way is to send crypto through a licensed or compliant intermediary that converts it into fiat, so the final payment is made in GEL. Only then is it recognized as an official salary with tax withheld and reported.
For companies working with Gegidze, this process is automated. You send crypto, it’s exchanged at transparent 1.2–1.5% rates, and employees receive their pay in GEL, USD, or EUR, fully compliant with Georgian labor law.
Payroll Taxes: Employees vs. Contractors
One of Georgia’s biggest attractions is its favorable tax system. Payroll taxation is straightforward and far lower than in most European or US markets.
For employees:
Hired under EOR (Employer of Record) contracts through Gegidze.
Taxes withheld and filed directly with the Revenue Service.
Employees pay just 5% personal income tax on salaries.
Official records help with visas, credit checks, and residency.
For contractors (Individual Entrepreneurs):
Registered as IEs with Small Business Status.
Pay just 1% turnover tax on annual income up to GEL 500,000.
Ideal for freelancers, part-time contributors, or DAO members.
This dual structure means companies can optimize payroll costs while workers benefit from legal recognition and low tax rates.
How Crypto-to-Fiat Conversion Works
Georgian banks only accept fiat. That’s why compliant conversion is critical.
The flow looks like this:
The company sends crypto to Gegidze.
Crypto is converted into GEL at low exchange rates (1.2–1.5%).
Salaries are deposited directly into employee or contractor bank accounts.
Gegidze files payroll taxes automatically with the authorities.
This ensures every step is compliant with AML and KYC rules, protecting businesses from frozen transfers or regulatory penalties.
The Risks of Paying Directly in Crypto
Some companies try to skip the conversion step and pay employees directly in Bitcoin or stablecoins. On the surface, it looks easier, but it creates serious problems:
No legal recognition: Salaries paid in crypto aren’t valid under Georgian law.
Tax compliance gaps: Without proper filings, companies risk backdated taxes and penalties.
No employment records: Workers lack official proof of income, which affects visas, mortgages, or future job applications.
Banking risks: Crypto inflows without documentation can be flagged or blocked.
By contrast, using Gegidze ensures all payroll is recorded, taxes are filed, and employees get official income records while still enjoying the benefits of crypto.
Industry Use Cases
Web3 Startups
Global Web3 companies often pay contributors scattered across multiple countries. With Gegidze, a Georgian payroll hub allows these startups to:
Pay developers with only 5% income tax.
Register contractors at 1% turnover tax.
Benefit from Virtual Zone status with 0% corporate tax on foreign-sourced IT revenue.
DAOs
DAOs often struggle to pay contributors legally. In Georgia, DAOs can route payments through Gegidze, converting crypto into GEL and issuing official payments. Members receive legal proof of income, while DAOs avoid misclassification risks.
iGaming Companies
The iGaming sector relies heavily on international contributors. Georgia offers 0% VAT on international revenue and tax-efficient payroll structures. Combined with Gegidze’s conversion process, iGaming firms can pay staff and contractors quickly and legally.
Crypto Mining Operations
Mining companies can operate from Georgia’s Free Industrial Zones, paying 0% corporate tax and importing hardware duty-free. Payroll is streamlined with Gegidze, ensuring both employees and contractors receive compliant, low-tax salaries.
Why Georgia Is Attractive for Crypto Payroll
Let’s put Georgia into perspective compared to other regions:
In the EU: payroll taxes often run 20–40%.
In the US: federal and state taxes push effective rates above 25%.
In Georgia: employees pay 5%, contractors 1%, and there’s no VAT on crypto conversions.
That’s why more blockchain companies are registering teams in Georgia. The savings are immediate, and the compliance is clear.
How Gegidze Simplifies Payroll
Running compliant payroll across borders is complex, but Gegidze makes it simple:
Bank account setup in 3–5 days, no power of attorney needed.
Employer of Record services for employees.
IE registration for contractors.
Automatic tax filing with the Revenue Service.
Crypto-to-fiat conversion at low exchange rates.
In short, Gegidze turns crypto payments into legal salaries, helping companies scale without compliance risks.
Conclusion: The Compliant Way to Pay in Crypto
Paying employees in crypto in Georgia is possible, legal, and highly tax-efficient. The key is converting crypto into GEL through a compliant channel and structuring payroll under Georgian tax law.
With Gegidze, businesses can:
Pay employees at only 5% income tax.
Register contractors at 1%.
Handle all payroll reporting automatically.
Stay compliant while cutting costs.
If your company wants to pay employees in crypto without compliance headaches, Georgia is the solution.
Book a free consultation with Gegidze and start payroll the legal, tax-efficient way.
Frequently asked questions
Can companies legally pay employees in crypto in Georgia?
Yes. Companies can pay employees in crypto, but salaries must be settled in GEL to be legally recognized. Through Gegidze, crypto is converted into fiat and paid directly into employee bank accounts, with payroll taxes filed automatically.
What is the tax rate for employees and contractors in Georgia?
Employees hired under Employer of Record contracts pay only 5% income tax, while contractors registered as Individual Entrepreneurs with Small Business Status pay 1% turnover tax on earnings up to GEL 500,000.
Do Georgian banks accept direct crypto deposits?
No. Georgian banks only accept fiat currencies like GEL, USD, and EUR. Crypto must first be converted into fiat. Gegidze handles this conversion at a low 1.2–1.5% rate, ensuring full AML and KYC compliance.
