Paid in crypto — UK Income Tax, PAYE and National Insurance
Quick answer: Crypto employment income is ‘money’s worth’ taxed through PAYE if you are employed — your employer should deduct Income Tax and NI. Self-employed contractors must declare the sterling value on Self Assessment. When you later sell tokens, CGT applies only on any increase in value since you received them.
Receiving salary or freelance pay in crypto is increasingly common in tech. UK tax treats it as income when received, not when you sell — though selling may trigger additional CGT.
Employed and paid in tokens
HMRC treats crypto pay as money’s worth. UK employers estimate sterling value, run PAYE, and deduct tax before paying you. Ask your employer if PAYE was applied. If not, you may need to pay through Self Assessment.
Self-employed and contractors
Invoice value in pounds or crypto fair value counts as trading or miscellaneous income. Register for Self Assessment if required. The £1,000 trading allowance may apply to minor side income.
When you sell the tokens
Acquisition cost for CGT is the income value you already paid tax on. Gain = sale proceeds minus that value. No double Income Tax on the same receipt.
Frequently asked questions
What if my employer pays from overseas?+
UK tax on UK-resident employees still applies. Seek advice for cross-border arrangements.