Token Tax Engine Calculations to Enable Key Executive Compensation and Compliance for Entire International Workforce
Hedera Hashgraph (“Hedera”) is the only public ledger that uses hashgraph consensus, a faster, more secure alternative to blockchain consensus mechanisms. It offers smart contract support, HBAR cryptocurrency and a decentralized file storage system, and works to verify transactions while ensuring the highest standard of security.
In 2019, it launched its publicly available version of the network and released developer tools. It has formed partnerships with major corporations and organizations, including IBM and the US Department of Defense. Since then, Hedera Hashgraph has continued to grow its developer community and support DeFi and other innovative use cases on its platform. This has been supported by the growth of and compensation philosophy for their contributor community in the US and internationally.
“If you’re looking for an all-in-one solution, Toku has built a platform to compliantly employ, manage, and pay employees in both fiat and token compensation. Their high-touch service allowed us to part ways with our Web2 provider and made us comfortable transitioning our key executives and entire international workforce.”
- Betsabe Botaitis - CFO and Treasurer, Hedera Hashgraph
Web2 EOR Providers Cannot Handle Token Tax Compliance, Leaving Employees with the Tax Bill
Hedera Hashgraph needed a solution that they could use to compliantly employ and compensate their team in both fiat and tokens. They onboarded with a Web2 Native Solution in Deel. After fully onboarding and running through their first payroll cycle, they noticed that Deel was unable to fully process or tax withholding for Hedera, who compensates their employees in part in native HBAR tokens. They need a solution that could process, calculate and remit token tax withholding obligations to local governments.
Their Key Executives and international team were not satisfied with the huge gap in token tax compliance. They also found the level of personalized support insufficient throughout the onboarding and payroll process.
All-in-one solution for employment, tax compliance, and fiat & token compensation
Token tax engine for precise calculations of employee and employer tax obligations
Seamless compliance across multiple jurisdictions around the world
High-touch, personalized support through 1:1 calls with each contributor
Employment, Payroll and Token Tax Compliance — All in One Place
Toku operates and is licensed as an Employer of Record (EOR) in over 75 countries globally. In addition to employment and tax compliance, Toku focuses specifically on token-compensation.
For Hedera, Toku was able to bridge the gap that was missing in Hedera’s employment and payroll processes: tax calculations and compliance for Hedera’s token grants and payments. After one month with Deel, Hedera knew that they needed another solution and quickly started surveying the market. They found that Toku was the only solution that could bridge the gap.
Toku’s partnership with Hedera started with understanding the full compensation package for each and every international employee, including their Key Executives. While other solutions address only the fiat or token piece, assessing the entire compensation package is critical in calculating the employee and employer tax obligation. Hedera needed a solution that would enable Key Executive payroll coverage for all fiat and token payments.
Toku was able to use its token tax engine to quickly and accurately calculate the employee and employer tax obligation on monthly and bimonthly payroll cycles for both fiat and token compensation, without leaving employees and their organizations with the tax bill.
Toku designed a payroll process with Hedera to request data, calculate withholdings and remit token tax payments to local governments in 5 international jurisdictions. This was enabled by a high-touch onboarding experience, personalized 1:1 calls with each contributor, and close collaboration with Hedera’s Finance, Operations and HR Teams.