How to pay contractors in crypto
Paying a contractor in USDC is quick and cheap to send. The work is in everything around the payment: making sure the person really is a contractor, collecting the right tax form, screening them, recording what the payment was worth, and filing at year end. This guide walks through each step with the rule behind it, then compares nine services that handle some or all of it for you.
In short
Confirm the person is a contractor, put the asset and network in the contract, collect a Form W-9 (US) or W-8BEN (non-US individual) before paying, screen them for sanctions, record the US-dollar value on the payment date, and file Form 1099-NEC for US contractors paid $2,000 or more in a year (the threshold for tax years after 2025).
Our pick to run it is Toku, which collects agreements and tax details, routes invoices for approval and pays USDC or USDT for $19 per contractor per month. Franklin is cheaper for US companies that want 1099s prepared, and Rise says it supports 60+ cryptocurrencies.
On this page:
- Seven steps
- How it works in the US and UK
- Providers compared
- Provider reviews
- FAQ
- Cite this guide
- Methodology and disclosure
How to pay a contractor in crypto, step by step
Confirm they're really a contractor
Paying in crypto doesn't change whether someone is an employee. Under the IRS test, a contractor is someone where you have "the right to control or direct only the result of the work and not what will be done and how it will be done" (IRS). If you treat an employee as a contractor without a reasonable basis, "you may be held liable for employment taxes for that worker" (IRS). In the UK, contractors working through their own company may fall under the off-payroll working rules, known as IR35 (GOV.UK).
Put the asset, network and fee terms in the contract
Write down whether the fee is fixed in a currency such as US dollars and paid in a stablecoin at the payout-day value, or fixed in the stablecoin itself. Name the asset and network, say who pays network and conversion fees, and set the invoicing schedule. This avoids disputes when a payment lands on the wrong network or the rate moves.
Collect the right tax form before the first payment
A US contractor gives you Form W-9 with their taxpayer identification number; the form tells them to "Give form to the requester. Do not send to the IRS." (Form W-9). If you don't get a TIN before making a reportable payment, you must backup withhold (Notice 2014-21, A-14), at 24% (W-9 instructions).
A non-US individual gives you Form W-8BEN "before income is paid or credited", and you keep it in your records rather than sending it to the IRS (W-8BEN instructions, W-8 requester instructions). A contractor's own company uses W-8BEN-E. For non-US contractors, "the place where the services are performed determines the source of the income" (IRS Publication 515), so record where the work is done: pay for services a nonresident performs in the US can be subject to US withholding.
Screen the contractor and check the wallet
Sanctions rules apply to crypto exactly as to bank payments. Asked whether obligations differ for digital currency, OFAC answers "Yes, the obligations are the same" (OFAC FAQ 560). OFAC lists some wallet addresses, but those listings "are not likely to be exhaustive" (OFAC FAQ 562), so screen the person and their country, not only the address. Confirm the address and network with the contractor, and consider a small test payment first.
Pay against an approved invoice and record the dollar value
For US reporting, a crypto payment to a contractor is reported at "the fair market value of the virtual currency in U.S. dollars as of the date of payment" (Notice 2014-21, A-13). Record that value with each payment. If your company pays with crypto it holds, the IRS says that when you pay for services using digital assets you "will have capital gain or loss on the disposition" (IRS digital asset FAQ, Q62), even if it's small for a stablecoin.
File year-end forms
In the US, "a payment made using virtual currency is subject to information reporting to the same extent as any other payment made in property" (Notice 2014-21, A-12). For tax years beginning after 2025, file Form 1099-NEC for a contractor you paid $2,000 or more during the year, a threshold that "may be adjusted for inflation beginning in calendar year 2027". It's due to the contractor and the IRS by January 31, payments to corporations are generally exempt, and if you backup withheld you file whatever the amount (1099-NEC instructions).
Keep the records
Keep each contract, tax form, invoice, transaction hash and the dollar value used. Your contractor needs the value too: their income is "the fair market value of the digital assets, measured in U.S. dollars, when received" (IRS digital asset FAQ, Q58).
How it works country by country
Yes, you can pay contractors in stablecoins with Toku. Here's how it works in the US and UK, and how to get the details for anywhere else.
How it works in the US
Yes, you can pay contractors in the US in stablecoins with Toku. They invoice in US dollars or USDC and are paid in USDC or USDT to their wallet, after you collect a Form W-9 and screen them.
How the US treats crypto and stablecoins
The IRS says: "For U.S. tax purposes, digital assets are considered property, not currency." It lists stablecoins among them (IRS, Digital assets, page last reviewed or updated September 2, 2026). It has treated virtual currency as property since Notice 2014-21 in 2014, so paying someone in USDC is paying them in property worth its US-dollar value on the day.
Payment stablecoins also have their own federal statute. The GENIUS Act (Public Law 119-27, signed July 18, 2025) defines a payment stablecoin as a digital asset "that is, or is designed to be, used as a means of payment or settlement", whose issuer must redeem it for a fixed amount of monetary value and represents that it will keep a stable value. Its section 17 amends federal securities and commodities law so that a payment stablecoin issued by a permitted issuer is not a security or a commodity, and under section 20 the Act takes effect 18 months after enactment or 120 days after final regulations, whichever comes first.
Paying in stablecoins there
For the contractor, crypto received for services "constitutes self-employment income and is subject to the self-employment tax", measured in US dollars on the date of receipt (Notice 2014-21, A-10). For you, the payment is reported and, where needed, backup withheld like any payment in property. The 1099 rules above apply to US contractors; non-US contractors who document their status on a W-8BEN generally aren't issued one.
Toku's US stablecoin payroll compliance guide covers the federal and state rules in more depth.
Toku handles the stablecoin payout, compliance and reporting (Toku, Stablecoin payroll). It describes itself as a "pioneering token payroll provider": founded in 2020, it started with token payroll in its first year and says it was built stablecoin-first rather than adding crypto payouts on top of fiat rails (Toku, About). Talk to us to learn how it works for your team.
How it works in the UK
Yes, you can pay contractors in the UK in stablecoins with Toku. They invoice in pounds sterling or US dollars and are paid in USDC or USDT to their wallet.
How the UK treats crypto and stablecoins
HMRC "does not consider cryptoassets to be currency or money" and taxes them by how they're used (HMRC Cryptoassets Manual, CRYPTO10100, updated November 28, 2025).
The Property (Digital Assets etc) Act 2025, which became law on December 2, 2025 and applies in England and Wales and Northern Ireland, confirms that a thing, "including a thing that is digital or electronic in nature", is not prevented from being the object of personal property rights merely because it is neither a thing in possession nor a thing in action. The Act doesn't name crypto; it covers things that are digital or electronic in nature.
Paying in stablecoins there
When a business, including a sole trader, receives tokens from customers or pays them to suppliers, "the tokens given or received will need to be accounted for within the taxable trading profits" (HMRC CRYPTO40350), converted to pounds sterling "using the appropriate rate at the time of each transaction" (HMRC CRYPTO40100). Employees are different: HMRC considers exchange tokens generally to be readily convertible assets, so crypto wages generally go through PAYE and Class 1 National Insurance (HMRC CRYPTO42100).
Toku also has guides to stablecoin payroll in the UK and IR35 for UK contractors in 2026.
Toku handles the stablecoin payout, compliance and reporting (Toku, Stablecoin payroll). It describes itself as a "pioneering token payroll provider": founded in 2020, it started with token payroll in its first year and says it was built stablecoin-first rather than adding crypto payouts on top of fiat rails (Toku, About). Talk to us to learn how it works for your team.
Any other country
Contractors anywhere Toku pays can invoice in local currency or US dollars and be paid in USDC or USDT to their wallet. In the US and UK the contractor reports the payment's value as business income and you keep records of what you paid and when. Other countries have their own tax, central bank, foreign exchange and reporting rules, so Toku confirms the steps for each contractor's country.
Toku publishes country guides too, such as whether you can pay in crypto and stablecoins in India, and a list of which countries let you pay entirely in crypto and stablecoins.
Toku handles the stablecoin payout, compliance and reporting (Toku, Stablecoin payroll). It describes itself as a "pioneering token payroll provider": founded in 2020, it started with token payroll in its first year and says it was built stablecoin-first rather than adding crypto payouts on top of fiat rails (Toku, About). Talk to us to learn how it works for your team.
Contractor crypto payout providers compared
Published prices on the date checked. "Not stated" means we couldn't find it on the provider's own site. Scroll sideways on a phone.
| Provider | Best for | Assets | Countries | Tax forms and screening | Price |
|---|---|---|---|---|---|
| TokuOur pick | Companies that want agreements, tax details, invoice approval and USDC or USDT payouts in one workflow | USDC, USDT | 100+ | Collects agreement and tax information at onboarding; exportable tax ledgers | $19 per contractor/month; AOR $149 |
| Rise | Contractors who want to choose among many cryptocurrencies, and US contractors who need a 1099 | USDC, USDT, 60+ cryptocurrencies | 190+ | W-8BEN and 1099s; KYC/AML | $49 per contractor/month |
| Request Finance | Crypto-native companies paying contractor invoices from a stablecoin account | USDC, USDT, DAI (26 networks listed) | 190+ (bank payouts) | Not stated | Plans from $50/month; no fee on stablecoin payouts |
| Remote | Companies billed in US dollars that want USDC for contractors at a low per-contractor price | USDC | 190+ (contractor management) | Not stated | $29 per contractor/month; Plus $99 |
| Deel | Companies on Deel whose contractors want to hold a dollar balance and withdraw to crypto | DLUSD balance; crypto withdrawals | 200+ (DLUSD in 80+) | Tax form guidance and document collection | $49 per contractor/month |
| Franklin | US companies that want 1099s prepared and the lowest per-contractor price | USD, stablecoins and crypto | US and global | Prepares and mails 1099s for US contractors | $15 per contractor/month (contractors-only plan) |
| Bitwage | Occasional contractor payments without a monthly fee | USDC, USDT, DAI, cUSD, BTC, ETH | Nearly 200 | Transaction CSV export | $0 plan with 1-2% deposit fees; Premium from $15.99 |
| Multiplier | Companies already using Multiplier that need BTC or ETH for a few contractors | BTC, ETH, USDC, USDT | 150+ | Not stated | $40 per contractor/month + 3.5% on crypto |
| BitPay Send | Paying contractors in many coins on top of an existing payables process | BTC, ETH, USDC, DAI and more (no USDT) | 225+ | Identity checks and sanctions screening | 1% per transaction |
Paying employees as well? Compare the best crypto payroll providers. Running a DAO or foundation contributor program? See the best Web3 payroll software.
The providers, one by one
1. TokuOur pick
Best for: Companies that want agreements, tax details, invoice approval and USDC or USDT payouts in one workflow
Toku pays international contractors in USDC or USDT and keeps the steps around the payment in the same place: it collects the agreement, tax information and payment details at onboarding, routes invoices for approval, and keeps payment records with exportable finance and tax ledgers. Its agent-of-record service covers contributor, creator and validator programs.
Strengths
- $19 per contractor per month, below Remote ($29), Multiplier ($40), Rise and Deel ($49)
- Onboarding, tax information, invoice approval and payment records in one workflow
- Agent of record for large contributor programs
Watch out for
- Its product pages name USDC and USDT only, not BTC or ETH
- Its pages don't say it files 1099s, which Franklin and Rise do
- Payout options and networks are confirmed per country and payout
Sources (checked November 8, 2026): Contractor management · Pricing · About
2. Rise
Best for: Contractors who want to choose among many cryptocurrencies, and US contractors who need a 1099
Rise pays contractors in 190+ countries in local currency, USDC, USDT or, it says, 60+ other cryptocurrencies. It handles W-8BEN and 1099 forms and KYC/AML checks, issues 1099s to US individual accounts, and doesn't issue 1099-equivalent forms to non-US residents.
Strengths
- Many payout assets
- Handles W-8BEN collection and 1099s
- Withdrawals on Arbitrum, Base, Ethereum, Optimism, Polygon and more
Watch out for
- Some US states don't support crypto transactions, per its help center
- No 1099-equivalent forms for non-US residents
- $49 is above Toku ($19) and Remote ($29)
Sources (checked November 8, 2026): Rise pricing · About · 1099 eligibility · Tax reporting for contractors · Crypto wallets
3. Request Finance
Best for: Crypto-native companies paying contractor invoices from a stablecoin account
Request Finance pays contractor invoices in USDC, USDT or DAI on its supported networks (26 listed), or converts to local currency for bank payouts in 190+ countries. It charges no processing fee on stablecoin payouts; you pay a monthly plan instead.
Strengths
- No fee on stablecoin payouts
- Invoices, approvals and bills in one account
- Wide network support
Watch out for
- Tax form collection isn't stated
- Approval workflows are on the Growth plan and up
- Business verification (KYB) before going live
Sources (checked November 8, 2026): Request Finance · Pricing · How to run payroll · Supported networks
4. Remote
Best for: Companies billed in US dollars that want USDC for contractors at a low per-contractor price
Remote's contractor management ($29) can pay contractors USDC through Stripe on Base, Aptos or Polygon while the company is billed in US dollars. Contractors choose a crypto account or a Stripe account, not both.
Strengths
- Low published price
- Regulated payments institution in Canada, the UK and the EEA, per Remote
- Three USDC networks
Watch out for
- USDC only
- Needs a company billed in US dollars
- A contractor can't have both a crypto and a Stripe account
Sources (checked November 8, 2026): Remote pricing · Contractor stablecoin payouts · Coinbase salary split · Remote homepage
5. Deel
Best for: Companies on Deel whose contractors want to hold a dollar balance and withdraw to crypto
Deel pays contractors in 200+ countries with 15+ payout options, including crypto. Contractors who've completed KYC can hold earnings as DLUSD, Deel's USD-denominated digital balance built with Stripe and Bridge, which is live in 80+ countries.
Strengths
- Broad contractor coverage
- Tax form guidance and document collection
- Contractors can hold a US-dollar balance
Watch out for
- DLUSD is Deel's own balance, not a bank account or legal tender, per Deel
- DLUSD needs KYC on Deel
- $49 per contractor
Sources (checked November 8, 2026): Deel contractor payments · Deel stablecoin wallet · Deel pricing
6. Franklin
Best for: US companies that want 1099s prepared and the lowest per-contractor price
Franklin pays US and global contractors in US dollars, stablecoins or crypto in one payment, on networks including Ethereum, Optimism and Base, and prepares and mails 1099 forms for US contractors.
Strengths
- $15 per contractor on its contractors-only plan
- Prepares and mails 1099s
- Non-custodial treasury
Watch out for
- Specific tokens aren't named on its main pages
- Full payroll is US-only
- No employer of record abroad
Sources (checked November 8, 2026): Franklin pricing · Multichain payments · W-2s and 1099s
7. Bitwage
Best for: Occasional contractor payments without a monthly fee
Bitwage pays contractors in local currency, USDC, USDT, DAI, cUSD, BTC or ETH, on a free plan funded by deposit fees or a Premium plan. It doesn't withhold tax and offers a transaction CSV export rather than tax forms.
Strengths
- No monthly fee on the free plan
- BTC and ETH available
- Blocks OFAC-sanctioned jurisdictions
Watch out for
- USDC isn't available to US users
- No tax forms described beyond a CSV export
- Percentage fees add up on larger invoices
Sources (checked November 8, 2026): Bitwage homepage · Bitwage business pricing · Fees · Employees vs contractors · Paystand acquisition
8. Multiplier
Best for: Companies already using Multiplier that need BTC or ETH for a few contractors
Multiplier pays freelancers and contractors in BTC, ETH, USDC or USDT through its partner Triple-A, with a 3.5% fee on amounts paid in crypto. Its FAQ says crypto is offered on request.
Strengths
- BTC and ETH as well as stablecoins
- Employers can pay in fiat and Multiplier converts
Watch out for
- 3.5% fee on crypto payments
- Offered on request
Sources (checked November 8, 2026): Multiplier pricing · Crypto via Triple-A · Crypto for freelancers
9. BitPay Send
Best for: Paying contractors in many coins on top of an existing payables process
BitPay Send pays employees and contractors in crypto, funded in fiat and converted by BitPay. Identity verification and sanctions screening are included, and BitPay holds a New York virtual currency license.
Strengths
- Many coins
- Sanctions screening included
- NYDFS virtual currency license
Watch out for
- USDT isn't on its payout list
- Funded in fiat only
- 1% on every payment
Sources (checked November 8, 2026): BitPay Send payroll · BitPay pricing
Frequently asked questions
Can you pay contractors in crypto legally?
Yes. The IRS and HMRC both treat a crypto payment for services as taxable at its value when paid, and the steps above keep it compliant. You need the contractor's tax form, sanctions screening, records of the dollar or sterling value, and year-end reporting. Talk to Toku about how it works in each contractor's country.
Do I need to issue a 1099 for crypto payments?
For a US contractor, yes, once you've paid them $2,000 or more in the year for tax years beginning after 2025 (the threshold was $600 before), with some exceptions such as most payments to corporations. Crypto payments are reported like any payment in property, at their US-dollar value on the payment date (IRS Notice 2014-21, A-12 and A-13). Form 1099-NEC is due by January 31.
What form do I need from a foreign contractor?
A non-US individual gives you Form W-8BEN before the first payment, and a non-US company gives Form W-8BEN-E. You keep the form in your records; neither is sent to the IRS. A W-8BEN generally stays valid until the end of the third calendar year after it's signed, unless the contractor's circumstances change.
How do I value a crypto payment for taxes?
In the US, use the fair market value in US dollars on the date of payment. For a stablecoin like USDC that's close to the dollar amount paid, but record it anyway. In the UK, convert to pounds sterling at the rate at the time of each transaction and keep a record of the method.
Which stablecoin should I pay contractors in?
USDC and USDT are the stablecoins most providers here name, while Deel gives contractors its own DLUSD balance. Agree the asset and network with each contractor in writing, because sending to the wrong network can lose funds.
Can I pay employees in stablecoins too?
Yes, through payroll rather than invoices: the salary is set and tax and social contributions are withheld and paid in local currency, and the employee opts in to receive their net pay, or part of it, in a stablecoin such as USDC. A payroll provider or employer of record that supports it, such as Toku, sets this up for each country. See what a crypto employer of record is and the best crypto EOR providers.
Cite this guide
PayContractorsInCrypto (Toku). "How to pay contractors in crypto." Updated November 10, 2026. https://paycontractorsincrypto.com/