The complete bitcoin tax guide to Get Paid in Bitcoin

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last updated on

1
Dec
2023

What is Get Paid in Bitcoin

Get Paid in Bitcoin is a convenient platform that allows users to build their Bitcoin wealth through automatic recurring payments. This model is designed as a simple 'set and forget' Bitcoin savings account, effectively enabling users to regularly invest a portion of their weekly wages into Bitcoin.

  • Effortless investment: With a one-time setup, you can seamlessly invest in Bitcoin either from your wages or through an automatic payment from your personal bank account.
  • Low fees: The platform holds a minimal transaction fee of only $1 per transaction. Importantly, they also absorb the blockchain fees when disbursing your Bitcoin pay.
  • Flexibility: Get Paid in Bitcoin empowers users by providing the ability to diversify the Bitcoin storage. You have the option to split your Bitcoin payment between multiple wallets, like a cold wallet for saving and a mobile wallet for day-to-day spending.

Do you have to pay tax on bitcoin?

With the ATO's initial bitcoin tax guidelines released back in 2014, it's been clear that bitcoin is taxable.

When you file taxes in Australia, you have a legal requirement to include everything you earn. This includes declaring any bitcoin gains made on Get Paid in Bitcoin along with any other Australian and overseas bitcoin platforms.

ATO tax treatment of bitcoin

There are two types of assessable income that your Get Paid in Bitcoin investments are taxed on in Australia:

Capital Gains Tax (CGT): You’ll end up with capital gains whenever you buy a bitcoin asset, and later sell it for a higher price. Capital gains and losses can result from trades, payments, gifts and many other transaction types.

Example: You buy Bitcoin on Get Paid in Bitcoin and later sell it, creating a Capital Gain that you must declare CGT on.

Ordinary Income: You can easily end up earning income from a variety of sources such as referrals, airdrops, earn programs and many more. These sources of income must be declared on your income tax return.

Example: You generate interest on Get Paid in Bitcoin, leading to Ordinary Income which must be declared.

Bitcoin tax isn't always straightforward. Make sure you have all your records and understand how to calculate what you owe. This helps prevent an unwanted ATO audit

Penalties for not declaring tax

The ATO has an annual $3.6 billion budget for administering Australia's tax system. Its Black Economy Taskforce plays a key role in fighting tax evasion, ensuring everyone pays their fair share. Australians who don't declare their taxes face severe consequences, including penalties, interest, fines, and the risk of criminal prosecution for tax evasion.

Australians who use Get Paid in Bitcoin and avoid declaring their profits are facing significant risk. Thankfully, Australia boasts one of the highest tax compliance rates, with over 93.7% of individuals fully meeting their tax responsibilities, indicating that only very few are actively trying to cheat the system.

Failing to file your taxes on time is risky, as it negatively impacts your standing with the ATO and the Australian Government. This increases the probability of being audited or reviewed. It also complicates the process of obtaining loans or mortgages.

Does Get Paid in Bitcoin report transactions to the ATO?

Get Paid in Bitcoin is an Australian registered entity, Get Paid In Bitcoin Pty. Ltd. (ABN 24 167 096 415). Get Paid in Bitcoin is registered as a Digital Currency Exchange (DCE) and has AUSTRAC registration number DCE100576719-001. As an AUSTRAC registered DCE, Get Paid in Bitcoin must perform KYC and know the identity of their customers. This is important for preventing criminal activity and scammers.

Since 2019 the ATO has been operating a data sharing program with Australian Digital Currency Exchanges. Under the data sharing program, Get Paid in Bitcoin must provide transaction data of their users to the ATO.

In short, the ATO knows about your transaction history on Get Paid in Bitcoin.

You’ll know the ATO has your bitcoin transaction data, as it will show in the prefill report on your tax return. That means it's important that you do calculate and declare your crypto gains, otherwise it’s only a matter of time before you end up under audit by the ATO.ATO pre-fill report showing bitcoin

ATO record keeping requirements

To complete your bitcoin taxes each year, there’s some important records that you need to keep. Having these records will help you to calculate and declare your bitcoin tax, and are also your evidence if you need to prove how your bitcoin tax was calculated.

The ATO record keeping requirements for bitcoin require you to keep the following:

  • receipts when you buy, transfer or dispose of bitcoin assets
  • a record of the date of each transaction
  • a record of what the transaction is for and who the other party is (this can just be their bitcoin asset address)
  • exchange records
  • a record of the value of the bitcoin asset in Australian dollars at the time of each transaction
  • records of agent, accountant and legal costs
  • digital wallet records and keys
  • a record of software costs that relate to managing your tax affairs

The ATO has also advised that records should be kept for at least 5 years.

Get Paid in Bitcoin Account Statements

Get Paid in Bitcoin has made an account statement export available to ensure you can meet your record keeping requirements. You can follow the account statement export instructions from Get Paid in Bitcoin to download a copy of the files.

You can download the following account statements from Get Paid in Bitcoin.

Your bitcoin tax software may also be used to satisfy the ATO record keeping requirements. Syla has been designed to satisfy Section 121.20 and Section 121.25 of the Income Tax Assessment Act 1997, that deals with ATO record keeping requirements.

Syla is an industry-leading bitcoin tax software that can be used for Get Paid in Bitcoin. Syla can be used to record your transactions by File Import. Syla keeps a record of the original source data, in the exact format it appeared on your account in Get Paid in Bitcoin, ensuring you meet your record keeping obligations.

Having your records is just step one, because now you’ll need to calculate the tax outcomes for each and every transaction. You’ll need to make sure you do it accurately, or you’ll be at increased risk from the ATO.

How is bitcoin taxed on Get Paid in Bitcoin?

We all know that bitcoin is taxed, but the exact tax treatment can vary. Understanding exactly how your different crypto transactions are taxed can not only help you meet your tax obligations, but it can actually help you to make smarter investment decisions.

Important: In the following sections we are considering the tax treatment of an individual investor. If you’re a trader or a different entity such as a Company, Trust or SMSF, your tax treatment may vary.

Purchase bitcoin

Capital Gains

Buying bitcoin on Get Paid in Bitcoin results in the acquisition of a CGT asset for tax purposes. While there are no immediate tax outcomes that need to be declared from a simple purchase, you do need to record the cost base.

The simple act of buying bitcoin on Get Paid in Bitcoin doesn't mean you'll pay taxes right away. You do need to know how much you paid for your bitcoin — this is known as your 'cost basis'. It’s the amount you'll use later to figure out if you made a capital gain or a capital loss when you decide to sell or use the bitcoin later on.

When you sell your bitcoin, that’s when you'll need to calculate the tax outcomes. If you sell it for less, you might have a capital loss. If you sell it for more, you'll have a capital gain that must be declared on your tax return.

How to do your Get Paid in Bitcoin taxes

By now, you've likely realised there can be a lot to bitcoin tax, and getting it done correctly can be tricky. Let’s find out how you can actually get your Get Paid in Bitcoin tax sorted.

ATO tax lodgement deadline

Our Australian financial year starts on the 1 July and ends on the 30 June each year, and you can prepare and lodge your tax return anytime after the 30 June up to 31 October.

The tax deadline for individual taxpayers is 31 October. Once you go past that date, your tax return is overdue, and your risk of penalties is increasing.

There is one way that you can easily extend your lodgement deadline though. You can receive an extended lodgement deadline till 15 May when lodging through a registered tax agent.

Some taxpayers find themselves with years of overdue tax returns. Unfortunately, the problem won’t just go away by ignoring it, and it’s only getting bigger in the meantime. With the ATO no doubt using the data collected from Get Paid in Bitcoin more effectively each year, it’s only a matter of time before they catch up with you.

If you do have overdue tax returns, then it’s always worth working with a good tax accountant. They’ll be able to help you get your tax affairs back up to date. In many cases, investors can even end up receiving tax refunds from years of unlodged tax returns.

Self-lodge vs using an Accountant

When lodging your tax return, there’s two ways to go about it. Self-lodge yourself through myTax (myGov), or by lodging through a tax agent.

Self-lodging your tax return is definitely more affordable, as it means you don’t have to pay for an accountant. However, you’ll need to be much more careful about how you calculate and declare your tax outcomes. Follow our comprehensive guide to self-lodging your bitcoin tax.

Using an Accountant does cost more, but it will save you a lot of headache, and you won’t have to worry whether your tax return was done correctly. You’ll also have someone you can ask questions and get tax advice from. If your bitcoin activity is particularly complex, then it might be worth looking at a bitcoin tax specialist to help you.

Regardless of which approach you take, you’ll need some type of tax software for recording your bitcoin transactions and calculating the tax outcomes.

If you’re an Australian taxpayer, then it’s advisable to use tax software built specifically for Australia, otherwise the tax calculations may not be done correctly, putting you at risk with the ATO

How to select bitcoin tax software

When it comes to managing bitcoin taxes in Australia, choosing the right software is crucial for compliance and ease of use.

Tax regulations and compliance requirements vary significantly across jurisdictions, and what works in one country may not be suitable in another. Australian bitcoin investors need tax software that is specifically tailored to the unique aspects of Australian tax law. It's essential that the software not only calculates these taxes accurately but also updates its tax logic as tax laws evolve.

Ensure the bitcoin tax software is built specifically for Australia. Otherwise you may declare your tax incorrectly or overpay more tax than required.

You should also check for the software’s ability to integrate with popular Australian and international bitcoin exchanges. Having good support for Get Paid in Bitcoin is a must, but you should also consider any other platforms you trade on.

Quality integrations are vital for maintaining accurate and complete records of all your bitcoin activities.

Bitcoin tax is complex, so having software that is user-friendly and intuitive will be a big help. Look for software that generates detailed, ATO-compliant reports which can be directly used for tax filings or shared with your accountant. You should also consider the level of customer support offered, and whether it's actually coming from an Australian support team.

If you don't have tax software for your bitcoin yet, then sign up for an account with Syla. It's the only tax software built exclusively for Australian bitcoin investors, and it has an industry-leading tax integration for Get Paid in Bitcoin

Using bitcoin tax software

Bitcoin tax software is designed to make doing your bitcoin taxes much simpler. The software will calculate all the tax outcomes for you, so you only need to import your transactions, make any edits as required, and download your final bitcoin tax report. All the complicated tax calculations are automatically done for you.

It’s really easy using Syla to do your bitcoin tax:

  1. Get started with a free account.
  2. Add Get Paid in Bitcoin as a data source and import your transactions.
  3. Add any other platforms and wallets.
  4. Review your transactions.
  5. Download your Crypto Tax Report.

Syla does all the heavy lifting for you. Your transactions will be imported and the tax calculations will be done for you. When using LTFO tax optimisation you can even achieve lower tax outcomes than you normally would.

Once you've downloaded your bitcoin tax report from Syla, you can either give it to your tax agent, or you can use it to self-lodge your own tax return.

Importing transactions from Get Paid in Bitcoin

The first step to getting your bitcoin tax sorted is to import your transactions from Get Paid in Bitcoin.

Syla has an industry-leading tax integration with Get Paid in Bitcoin. You can use the File Import in Syla.

File Import

Using a File Import is an effective way to import all your transactions on Get Paid in Bitcoin as it’s safe and easy to do.

If you get stuck, we also have an Assisted File Import process.

Download your bitcoin tax report

Once you have all your transactions imported into Syla, you can view them, make edits if needed and import any other Data Sources that you have.

After you’re happy with everything, you can download your Crypto Tax Report.

ATO bitcoin tax report

Tax software for Get Paid in Bitcoin

It's very difficult to correctly calculate all the tax outcomes of your bitcoin by hand unless you're a tax accountant.

If you are using a tax accountant, then you probably don’t want them doing it by hand either, as it's going to take a long time and cost a lot.

That’s where using bitcoin tax software can save you a lot of time and money, that you'd rather spend doing something else. 😊

Syla is the only bitcoin tax software designed specifically and only for Australia. Syla not only calculates all your tax outcomes to ensure you are ATO compliant, but it also optimises your tax to ensure you pay the lowest bitcoin tax legally possible, saving you both time and money.

  • Best value - $59 AUD for 10,000 transactions.
  • Absolute certainty - purpose-built for Australian tax law.
  • Maximise your tax savings - using Syla's proprietary LTFO method.

👉 Get started for free.


Disclaimer

The information in this article reflects our understanding of existing legislation, proposed legislation, rulings and other tax law, as at the date of issue. In some cases, the information has been provided to us by third parties. While it is believed the information is accurate and reliable, this is not guaranteed in any way.

The information provided in this article is purely factual in nature and does not constitute tax advice, financial product advice or legal advice. The information is not, nor is it intended to be, comprehensive or a substitute for professional advice on specific circumstances. If you require professional advice that takes into account your particular circumstances, you should consult an appropriate professional.

Tax Questions

Still have questions?

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We’ve partnered with every major Australian crypto platform to ensure crypto tax is simple and easy.

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