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When you are paid in crypto for goods or services, the CRA treats it as barter. You report the Canadian dollar value you received as income, and that value generally becomes the cost of the coins. A GST/HST registrant charges tax on the fair market value. Selling bitcoin itself is an exempt financial service.
Is getting paid in crypto taxed as income?
Yes, if the payment is for goods or services. The CRA page on income from crypto transactions says that using crypto to pay for goods or services is treated as a barter transaction for income tax purposes, and that the vendor must include in income the value of the goods or services provided, using whichever value is more readily valued. In practice, a freelancer or shop owner paid in coins reports the dollar value of the work or goods, the same as if a customer had paid with a card.
Whether it is business income or something else depends on the activity, the same as for cash. A person selling services regularly is usually self-employed, and our page on crypto tax in Canada covers business income versus capital gains. Payment of wages in crypto is a different matter, covered below.
How do you value the crypto you received?
The CRA value page accepts fair market value in Canadian dollars, using a reasonable and consistent method, and says each coin must be valued separately. The rate source is not prescribed. A broker rate or an average of several exchanges can work. Whatever you pick, note the source, the date and the time, and use the same approach every time.
For a sale, the CRA says the more readily valued side of the deal sets the number. If you sell a service priced at $2,400 in dollars and the customer sends coins worth $2,400 at that moment, your income is $2,400. If the coin price moves five minutes later, that does not change your income. It changes your gain or loss when you later dispose of the coin.
What cost does the coin carry afterwards?
The value you included in income generally becomes the cost of the coins you now hold. That is the same logic as buying them at that price. We did not find that spelled out in one sentence on the CRA pages we read, so treat it as the general rule and confirm it with the CRA or an accountant if the amount is large.
Here is an example with made up numbers. You are paid in coins worth $2,400 for a job. Your income is $2,400 and the coins now have a cost of $2,400. Later you spend them on goods worth $3,000. Using coins to buy goods is a disposition, so the proceeds are $3,000, the cost is $2,400, and the gain is $600. Half is taxable, which is $300. Our capital gains tax calculator shows how that adds to your return.
| Step | Amount | Tax result |
|---|---|---|
| Job paid in coins | $2,400 | $2,400 income |
| Coins held, cost | $2,400 | No tax while held |
| Coins spent on goods worth | $3,000 | $600 gain, $300 taxable |
Keep a ledger for each receipt so you know the cost of every coin you hold. The CRA books and records page lists what to record, including the value in Canadian dollars at the time and the other party.
When does a business collect GST/HST on crypto payments?
The CRA GST/HST page says a registrant that accepts crypto as payment must value it at fair market value at the time of the transaction. GST/HST is calculated on that value. If you sell taxable goods or services, you charge the tax in the normal way. The payment method does not change whether tax applies.
An example with made up numbers, for a registrant in a 13% HST province. A service is priced at $2,400 plus $312 of HST, a total of $2,712. If the customer pays in coins, the coins must be worth $2,712 when received, and you record $2,400 of income and $312 of tax collected. Our page on the GST/HST and the GST/HST calculator show rates by province.
Keep records that show how the dollar value was determined. The CRA page says the registrant should keep them.
Are crypto sales exempt from GST/HST?
It depends on the kind of crypto. The CRA page says that if the coin meets the definition of a virtual payment instrument in the Excise Tax Act, selling it is an exempt supply of a financial service, so no GST/HST applies and the seller cannot claim input tax credits on that sale. It names bitcoin, ether and litecoin as examples. For other crypto-assets, a sale by a Canadian resident is likely a taxable sale of intangible personal property, with GST/HST generally due and input tax credits usually available.
| Type of crypto-asset | Sale by a registrant |
|---|---|
| Virtual payment instrument (the CRA names bitcoin, ether, litecoin) | Exempt financial service, no GST/HST, no input tax credits |
| Other crypto-assets | Likely a taxable supply of intangible property |
| Mining for yourself | Generally not a commercial activity for GST/HST |
| Mining for a known person | May be a taxable supply, with input tax credits on expenses |
The CRA also describes special rules for non-resident suppliers and platforms under the digital economy rules. If you sell to people outside Canada, keep records of where the customer is. The page points to GST/HST Notice 324 for details on mining.
What is the small supplier limit?
A small supplier is not required to register. The CRA defines it as a person whose worldwide taxable supplies, including those of associated persons, are $30,000 or less in a single calendar quarter and over the last four consecutive quarters. Higher thresholds apply to public service bodies, and charities and public institutions have a gross revenue test of $250,000. The calculation leaves out sales of goodwill, financial services and capital property. Sales of coins that are exempt financial services are therefore not counted toward the $30,000. Our page on GST/HST for small business explains registration.
If you are a small supplier, you do not charge GST/HST on taxable sales, but you also cannot claim input tax credits. Income tax still applies to everything you receive.
What about wages paid in crypto?
We could not confirm this from a CRA source. The CRA GST/HST and income pages we read say nothing about payroll withholding, T4 amounts or employer reporting when an employee is paid in coins. If you are an employer or an employee in that position, ask the CRA or a payroll professional how the amounts are valued, withheld and reported. Do not assume that paying in coins avoids source deductions.
This page is information only. We do not give advice, we do not represent the CRA or any organization, and we do not guarantee accuracy.
Frequently asked questions
Do I pay tax if a client pays me in bitcoin?
Yes. The CRA treats paying with crypto as barter, so the vendor includes the value of the goods or services provided in income. You report the dollar value of the work at the time of payment, then track the coins at that cost for any later gain or loss.
What value do I use for crypto I received?
Use fair market value in Canadian dollars at the time you received it, using a reasonable method applied consistently, and value each coin separately. The CRA does not prescribe a rate source. Write down the source, date and time so you can show how you got the number.
What is the cost of coins I was paid with?
Generally it is the value you included in income. If you were paid coins worth $2,400 and later spend them on goods worth $3,000, the gain is $600 and $300 is taxable. We found this rule stated as general practice, not in a single CRA sentence, so confirm it if the amount is large.
Do I charge GST/HST if I accept crypto?
If you sell taxable goods or services and are registered, yes, calculated on the fair market value of the crypto at the time. The payment method does not change whether tax applies. Keep records showing how you valued the coins, as the CRA page asks.
Is selling bitcoin subject to GST/HST?
The CRA says the sale of a virtual payment instrument is an exempt financial service, so no GST/HST is charged and no input tax credits are claimed on that sale. It names bitcoin, ether and litecoin. Other crypto-assets are likely taxable supplies of intangible property.
Do I need to register for GST/HST if I take crypto payments?
Registration depends on your taxable sales, not on the payment method. A small supplier with $30,000 or less in taxable supplies in a quarter and over four quarters need not register. Above that, registration is generally required. Check the CRA small supplier rules for your situation.