Crypto Payment Solutions for Freelancers: A Beginner’s Guide

High fees, hidden charges, unfavourable exchange rates, and long delivery times — these are all so typical for global money transfers via traditional payment methods. And if you’re a freelancer working with international clients, you’ve probably run into these problems when receiving your pay. 

You can avoid all these issues if you get paid in crypto. If you want to get into cryptocurrency payments too but don’t know where to start, you can find all the basic information here in this article. 

Understanding the basics 

Crypto is digital money that exists solely online and is secured by cryptography. There are two cryptographic keys that enable its security. One is public and serves as an address — you send it to those you work with, and they can transfer the payment there. Another key is private — the one who has it can access the money. If you lose your private key, you lose the funds. 

There is a worldwide network of computers, called blockchain, backing cryptocurrency. It is decentralised and not controlled by any one entity or government. Unlike fiat currency, crypto is often subject to large fluctuations, which are based on market demand and supply. 

As fast and secure as crypto is, it is way more volatile than fiat money. Take Bitcoin, for example. It’s been changing its value dramatically over the years. 

There are many types of cryptocurrency classifications out there. Not to get too much into detail, let’s break them down into two.

Although cryptocurrency has proven to be a great alternative to sending money via banks or other intermediaries, there are certain risks you may face: 

• Phishing. These are emails and messages pretending to be from credible platforms. Double check email domains, never share your private key or any other information, and don’t press on links from unverified sources. 
• Fake wallets. Go for trusted wallets and services with strong reviews and only use official websites and applications. 
• Suspicious crypto gigs. Here, basic freelance safety rules apply: if they ask you for upfront fees or the pay seems too good to be true, ignore the offer. 

Being a little extra careful is always a good idea. Now, let’s see how freelancers can use crypto to their advantage. 

How do crypto payments work? 

Getting paid in crypto is actually pretty straightforward once you get the hang of it. Here’s the basic procedure:

• You send your public wallet address to a client. This is a long and at first intimidating string of letters and numbers. It is kind of like your bank account number, which can look like this — 0x4B0897b0513fdc7C541B6d9D7E929C4e5364D2dB. 
• Your client sends the payment to your wallet. They transfer the amount from their wallet to your address. 
• You wait for the verification on the blockchain. Don’t worry, it usually takes no more than a couple of minutes. 
• Crypto lands in your wallet. You can now use it however you like — spend, invest, or save. Bear in mind that in some countries, cryptocurrency is partially restricted or completely prohibited. Always check with the local laws first. 

Before we continue: make sure you double-check your wallet address prior to sending it to a client. That’s because if you share the wrong address, you can say goodbye to your money — cryptocurrency transactions are irreversible. 

Which wallet to choose? 

You probably have your bank’s app installed on your phone. A wallet is basically the same but for crypto. There are hot wallets that connect to the internet and cold wallets that function offline, similarly to a USB. That’s also where you get your keys mentioned above. 

Since hot wallets are more popular and beginner-friendly, let's compare some of the most common options. And in case you need it one day, they all support cold storage via integration with hardware wallets like Trezon or Lodger. 

There are a lot of wallet options available. Let’s say you’ve chosen one and already received your first crypto payment. What’s next? How do you cash out the money now? There are two platforms you can choose — an on/off ramp or a crypto invoicing application. 

What do on/off ramps do? 

On/off ramps are crypto exchanges that let you buy crypto with fiat money and vice versa, respectively. Many of them are centralized (meaning you don’t have complete control of your keys), like Binance, Coinbase, or Kraken. Each has different requirements in terms of minimum deposits, withdrawals, and fees. 

There are also decentralized options like Transak or Ramp Network, where users are the ones in control (more or less). The way it works is you connect your external wallet to a platform, and when you sell/buy, funds go directly to or out of your wallet. There is no need to share your key with a platform, which, on the downside, means a more complicated withdrawal process. 

Finally, there are Peer-to-Peer (P2P) on/off ramps. That is when you trade directly with another user and can get the money in the local currency. It’s more private and can be risky sometimes. However, many platforms have an escrow feature now — that is when the platform acts as a third-party, keeping the money and only releasing it after the conditions have been satisfied. 

P2P was the method Anna, today’s expert, used for withdrawing her crypto payments. 

I don’t normally get paid in crypto. A company I did a series of marketing audits for asked me if I took crypto payments. I said yes out of curiosity, just because I wanted to try something new. I used Binance’s P2P platform to cash out because I didn’t feel like connecting my bank account to a big exchange. It was a bit tricky to set up for the first time because I knew nothing about how these things worked. But my client helped me a lot through the process. 
I sold my USDT to another user in Poland. He sent the złotys to my bank with a regular transfer. This method can be risky, so always remember to check the seller’s reviews before you accept the trade. If it was more than just a couple hundred dollars, I would’ve probably gone with another option, just to feel safe.

{{Anna Markowska}}

While on/off ramps can be a solution for getting paid in crypto, it takes a lot of manual work to track each transaction. To get cryptocurrency, freelancers can also use invoicing applications. 

What do crypto invoicing applications offer? 

If you work with clients who pay in crypto regularly, an invoicing app can be perfect for you. The concept isn’t new — it’s very much like PayPal or QuickBooks, but for crypto. The invoicing process is the same as well: 1) you send an invoice, 2) a client transfers you the money, 3) you get the money in your wallet. 

Let’s compare five popular apps. I’ve decided not to include fee information as it always varies depending on the currency, network, and account type. I recommend doing your own research before making a decision. 

Invoicing platforms are great for freelancers who want to stay compliant with their earnings when receiving crypto. They keep everything organised, so filing tax reports gets way easier. Speaking of taxes, there are several things you need to know. 

What about tax obligations? 

When it comes to crypto-specific tax obligations, it all depends on where you’re based. In some countries, crypto is completely legal, and in others, it is partially restricted or even banned. 

Let’s say you’re located in the US. To stay compliant, you need to learn about IRS requirements on digital asset record keeping and tax filing. Here are some resources you might want to check out: 

If you’re located elsewhere, here’s a list questions you can start your research with to stay compliant: 

1. Is cryptocurrency legal in my country? Are there any restrictions on what cryptocurrency freelancers can use, can they get paid with crypto, trade it, etc? 
2. Are crypto payments considered taxable income in my country? For example, in Poland, it is. Our contributor Anna shared that she had to report her crypto payments the same way she reports ordinary income. One thing to keep in mind is that you need to report it with the rate on the day it was received. 
3. How should I calculate the value of the payment? In most cases, you’d convert to the local currency. 
4. What data should I collect? It typically includes the amount received, its equivalent in the local currency on the day of the transaction, crypto type, date, wallet addresses, and invoice. 
5. What happens if I sell, trade, or spend the crypto from my wallet? It’s important to pay attention to that because using crypto can be subject to capital gains tax, like in the US or the UK. 
6. What taxes should I pay? And are there any tax exemptions in my case? For instance, in the EU, crypto is CAT-exempt unless you’re VAT-registered and provide services paid for with crypto. 

I’d recommend consulting with a local accountant or tax advisor just in case. Crypto is a new domain, and the regulations around it change quite often.

Getting paid in crypto may feel intimidating at first, but mastering it is totally worth your time. It is especially relevant to full-time solo workers catering to a global network of clients. 

Learning to accept crypto can be super beneficial if you’re in a country that is underbanked — such as Nigeria, Kenya, or the Philippines. Or, if you’re living in a country with high inflation like Argentina or Turkey. Remember to stay compliant and safe, and good luck! 

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