Crypto Grant FAQs for Employees

If your company just offered you a token grant, you’re not alone. More Web3 and Web2.5 companies than ever now compensate employees with tokens, whether they’re governance tokens, utility tokens, or equity-like instruments tied to the growth of the project.

It’s exciting. But it also raises questions.

How do taxes work? When do tokens vest? What happens if I move countries? What if the project’s token price changes? Where do tokens even “go” when they vest?

This guide answers those questions in plain English, based on what Toku has learned while helping companies issue compliant token compensation across 100+ countries.

If you’re looking for guidance from the employer perspective, visit the full Token Tax & Compliance Resource Hub or our breakdown of crypto payroll compliance in the U.S..

This article focuses on what employees need to know.

Why Companies Offer Token Grants

Token compensation exists for a reason - and it’s not just because it’s “Web3-native.” Tokens give contributors real ownership in the protocol, foundation, or product they’re helping build.

For employees, the upside includes:

• Participation in project growth
  
• Additional income potential if the token appreciates
  
• Ownership that aligns you with the long-term vision
  
• A flexible, globally accessible form of compensation

For employers, token grants are a scalable way to reward contributors without depending entirely on fiat payroll, especially for distributed teams.

But with upside comes complexity, which is where this guide comes in.

Vesting: When You Actually Receive Tokens

Most token grants vest gradually over time, just like equity at a traditional tech company.

A standard vesting schedule might look like:

• A 1-year cliff (nothing vests until month 12)
  
• Monthly or quarterly vesting afterward
  
• A total duration of 3–4 years

Until tokens vest, you usually can’t sell, move, or claim them. They may sit in an employer-managed or Toku-managed escrow structure while you earn them.

When vesting finally begins, your tokens are considered compensation, which is why:

• your employer must track fair-market value
  
• taxes may apply
  
• custody rules matter
  
• your residency affects the tax treatment

Toku’s platform helps companies automate much of this, so vesting stays compliant no matter where contributors live.

Where Tokens Go When They Vest

Depending on how your company handles custody and compliance, tokens may be delivered to:

• your self-custody wallet (e.g., MetaMask, Ledger)
  
• a custodial wallet managed by the employer or a partner
  
• a Toku-managed wallet for jurisdictions requiring additional verification
  
• a hybrid setup (common for contributors receiving both tokens and stablecoins)
  

The important part: any wallet receiving tokens typically must pass KYC/AML verification, which Toku facilitates for global compliance.

Taxation: What You Owe and When You Owe It

This is where most employees get confused - and understandably so.

Here’s the simple version:

1. Token grants are usually taxed when they vest or when you exercise them.

At vesting/exercise, tokens count as compensation income equal to their USD fair-market value.

That means:

• If 1,000 tokens vest today
  
• And the token is worth $2 USD
  
• You may have $2,000 in taxable income

This is true whether you sell the tokens or not.

2. Selling tokens later may incur capital gains tax.

After vesting, any additional increase in value is typically treated as a taxable gain when you sell.

3. Your country determines the rules.

Some examples:

• U.S.: Income tax at vesting; capital gains at sale
  
• U.K.: Similar model; employer withholding may apply
  
• Switzerland: Often social contributions apply on the FMV of vested tokens
  
• Singapore: May be treated differently depending on employment structure
  
• Portugal / UAE: Historically crypto-friendly, but rules change frequently

For a country-specific breakdown, explore Toku’s Country Explorer.

What Happens If the Token Price Changes?

Token volatility is normal, and it affects taxation:

• If the token drops in value after vesting, you may still owe taxes based on the vested day price
  
• If the token spikes later, the gain is typically taxed separately when you sell
  
• Some countries allow deductions or offsets; others do not

This is why many employees choose to convert a portion of vested tokens into stablecoins to cover potential tax obligations.

Can I Sell My Tokens Immediately?

It depends on:

• the company’s token lockup rules
  
• any regulatory restrictions
  
• vesting or transfer limitations
  
• your wallet setup and jurisdiction
  
• whether the token is actively traded

Some grants release into a lockup period; others vest fully tradable. Toku ensures companies document this properly so employees know exactly what’s allowed.

What Happens If I Change Countries?

Changing tax residency can change:

• how future vesting is taxed
  
• how previous vesting is taxed
  
• whether social contributions apply
  
• which records you must keep

If you're relocating, coordinate early with:

• your employer
  
• local taxation guidance
  
• Toku’s compliance team (companies using Toku have access to country-specific insights)

It’s better to fix documentation proactively than to try to correct it during tax filing season.

Receiving Part of Your Compensation in Stablecoins

Many token-compensated employees also receive part of their pay in stablecoins like USDC.

Stablecoin payroll is becoming common for contributors around the world, especially those working for DAOs or globally distributed teams. If you want a deeper dive, see:

• Toku’s Stablecoin Payroll Overview
  
• Toku Payroll Product Page
  

Stablecoin payments are typically taxed the same way as fiat - based on USD value at the time you receive them.

Recordkeeping: What You Should Save

To avoid stress during tax season, save:

• Vesting statements
  
• Payslips or compensation records
  
• Transaction hashes
  
• Token FMV records
  
• Any withholding documentation

If your employer uses Toku, these are generated automatically and stored in a compliant, audit-ready format.

Security: Keeping Your Wallet Safe

If you self-custody your tokens, basic safety rules apply:

• Use hardware wallets when possible
  
• Avoid signing transactions you don’t understand
  
• Use phishing-resistant password managers
  
• Keep backups stored securely and offline
  
• Never share seed phrases with anyone

If the employer uses a custodial model, they’ll manage these safeguards for you.

Employee FAQs

Can I get paid in both stablecoins and tokens?

Yes. Many contributors receive a mix of USDC and vested tokens. Stablecoins usually function like regular payroll, while tokens follow vesting and tax rules.

Do I owe taxes the moment I receive tokens?

Generally yes, when tokens vest or when you exercise them. They are treated as compensation income based on fair-market value.

What if my tokens aren’t liquid yet?

Some jurisdictions still treat them as taxable compensation. Your employer should give you documentation outlining their valuation method.

Can my employer deposit tokens into my own wallet?

Often yes, but the wallet must pass KYC/AML checks. Some countries require custodial solutions.

What if I move countries mid-vesting?

Your tax treatment may change. Document everything. Toku helps companies stay compliant when contributors relocate.

Where can I learn more about global rules?

See Toku’s country-by-country payroll and token compensation guides.

Closing Thoughts

Token compensation is one of the clearest expressions of ownership in Web3. It gives contributors skin in the game - and historically has created meaningful wealth for early builders.

But it only works well when it’s documented, compliant, and understood.

Your employer’s job is to issue tokens correctly.
Your job is to understand what you’re receiving and how it fits into your financial picture.

And if your company uses Toku, you’re already ahead - because the entire process, from vesting to tax documentation, is built to be compliant, global, and easy to navigate.