Pay employees using paypal?

I’m trying to decide if it would be worth paying my employees via paypal.

-By using credit card as a pass-through, I ‘earn’ frequent flyer miles
-convenient for both sides

-paypal % tacked on to each transaction

Is there a con besides that? I’m going to ask my accountant, but thought I’d throw this out to see if someone else has dealt with this.

Would be a great way to build up some frequent flier miles!

How do you plan on withholding taxes using Paypal?

I think it might be against Visa / Mastercard rules & regulations. I am sure it has been done - but their rules & regulations leave much to interpretation, their interpretation. Even though you might do it for contractors & freelancers, employees might be a bit different. And one thing to consider is - how will you actually pay the employee that discount rate? You will need to add on enough to cover it otherwise you will be guilty of ‘cheating’ the employee.

It all depends on what you call employees. A lot of times they can be classified as consultants which would make paypal just fine.

Legally, employees cannot be classified as consultants. They have different legal definitions, and in some cases even referring to a consultant as an employee within earshot of the IRS nullifies any benefits of them being a consultant or outside contractor.