Crypto as a salary: BAG decides on digital payments in Germany!

Crypto as a salary: BAG decides on digital payments in Germany!

In a landmark ruling on April 16, 2025, the Federal Labor Court (BAG) decided that paying wages in cryptocurrencies, such as Ethereum, is permissible under certain conditions. The case concerns an employee who requested that outstanding commissions be paid out in Ether after the termination of her employment relationship. The employer refused to pay and invoked Section 107 (1) of the Trade Code, which requires wages to be paid in euros. However, the BAG rejected this argument and made it clear that cryptocurrencies cannot be viewed as “money” in the classic sense, but are permissible as a benefit in kind according to Section 107 (2) GewO as long as it is in the employee's interest. This means that employers and employees must agree to a crypto payment.

The BAG made it clear that at least the part of the salary that cannot be seized must be paid out in euros in order to ensure the employee's livelihood. It is therefore not enough that the employer viewed the euro payment as sufficient fulfillment of the commission claims. The decision also shows that the crypto payments are treated as benefits in kind, similar to company cars, for example, and may only make up the seizable part of the salary.

Regulations on cryptocurrencies and labor law

It is essential that the employer adjusts the payroll to correctly determine the amount that cannot be seized and to ensure that this part is paid out in euros. If this euro priority rule is violated, the benefit-in-kind agreement remains partially effective as long as the non-seizable portion is paid in euros. In addition, the employee bears the risk of cryptocurrency price fluctuations, which is one of the challenges when paying in Ether.

With this regulation, the legislature aims to ensure that employees can cover their daily living needs in cash and are not forced to exchange non-cash benefits such as Ethereum for euros in order to pay their rent or food. At the same time, dependence on social benefits should be prevented.

Outlook and individual agreements

The BAG ruling will ensure that German labor law continues to adapt to digital developments without abandoning fundamental protective mechanisms. However, open questions regarding the general terms and conditions control of crypto payment clauses in standard contracts remain. To minimize legal risks, employers may prefer individual crypto payment agreements.

Overall, the decision shows that employee rights must be protected even in the digital age, while at the same time considering innovative solutions such as the integration of cryptocurrencies into salary payments.

For detailed information on this topic you can read the articles on zm-online.de and Arbeitsrechtsiegen.de read up.