Player salaries

[jol]

Question about when players get paid, is it year around, every two weeks or just during the regular season, from mid-october till mid-april?
My point is that there might distressed teams, now during the summer they are doing ok, people paying their season tickets etc, but when in October is time to start paying salaries, some teams might have difficulties to come up with $4-5 million salary payments every two weeks (if players get their paychecks biweekly) .

JOL

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[kdb209]

Question about when players get paid, is it year around, every two weeks or just during the regular season, from mid-october till mid-april?
My point is that there might distressed teams, now during the summer they are doing ok, people paying their season tickets etc, but when in October is time to start paying salaries, some teams might have difficulties to come up with $4-5 million salary payments every two weeks (if players get their paychecks biweekly) .

JOL

Semi monthly (on the 15th and 30th) during the Regular Season.

Payment of such Paragraph 1 Salary shall be in consecutive semi-monthly installments on the
15th and 30th day of each month following the commencement of the NHL Regular Season or
following the dates of reporting, whichever is later (provided that the pay period shall not close
more than three (3) days prior to payroll dates); provided, however, that if the Player is not in the
employ of the Club for the whole period of the Club's NHL Regular Season Games, then he shall
receive only part of such Paragraph 1 Salary in the ratio of the number of days of actual
employment to the number of days of the NHL Regular Season.

I guess technically the Players get royally screwed in February - they're still waiting for all the Feb 30ths since the lockout .

 

[Scintillating10]

How much do players take home out of their salary? After income tax, agents, and other deductions.

 

[hizzoner]

How much do players take home out of their salary? After income tax, agents, and other deductions.

With all the varying tax rules in different countries, states and provinces there is no one answer.

 

[CartographerNo611]

With all the varying tax rules in different countries, states and provinces there is no one answer.

Escrow is applied uni formally. John Scott on his recent podcast episode mentions it was usually between 11-18% when he was playing.Next season will be 20-40%. Players take home a lot less then what the public perceives.

 

[LadyStanley]

Search on "jock tax" and that will give you an idea of how players paychecks are impacted.

If you live in a non-income tax state, you only have to pay federal taxes, plus state taxes for games/days you are in that state. Very complicated.


Note that the NHLPA voted to NOT take their April 15 (last) paycheck, applying that ~$120m to escrow.

 

[StreetHawk]

Not to mention the importance of signing bonuses to players who are in States with No State Income Tax. That will be deemed earned in that No Income Tax State whereas salary is deemed earned in the state where the game in played for the Jock Tax.

Plus, with Escrow, players are going to have to submit adjustments for their taxes. Like when the NHL refunded the players a portion of their escrow payments for the 18-19 season earlier this year. Player may need to declare taxes on their salary before escrow and then submit escrow deductions to get a refund back on their taxes. Every player needs a professional to handle that for them.

 

[Scintillating10]

With all the varying tax rules in different countries, states and provinces there is no one answer.

What percentage a star like Carey Price take home? I imagine 50% to in income tax alone. Then Escrow, Agent fees, etc...

 

[LeHab]

Andrew McCutchen pay stub, should be similar for hockey players:

 

[mouser]

Not to mention the importance of signing bonuses to players who are in States with No State Income Tax. That will be deemed earned in that No Income Tax State whereas salary is deemed earned in the state where the game in played for the Jock Tax.

Plus, with Escrow, players are going to have to submit adjustments for their taxes. Like when the NHL refunded the players a portion of their escrow payments for the 18-19 season earlier this year. Player may need to declare taxes on their salary before escrow and then submit escrow deductions to get a refund back on their taxes. Every player needs a professional to handle that for them.

Signing bonus jurisdiction taxation is a lot more complicated then most simple websites would suggest, especially if the jurisdictions cross national borders.

I'm not sure how it works in Canada vs the U.S. But in the U.S. players are probably able defer any taxation on income placed into escrow until the escrow is resolved. The general rule on escrow in the U.S. is that income and taxes can be deferred so long as the person receiving the escrow distribution (player) doesn't have to power to control the escrow situation, especially deposits into escrow.

And yes, they absolutely need professional tax advisors.

 

[alko]

Andrew McCutchen pay stub, should be similar for hockey players:

Do i understand it correctly? From 2 244 370 he will see only 427 098?

 

[82Ninety42011]

Do i understand it correctly? From 2 244 370 he will see only 427 098?

He's getting 427,098 net from 820,659 gross. The 2,244,370 is year to date I believe gross.

 

[Mickey Marner]

How much do players take home out of their salary? After income tax, agents, and other deductions.

A wealth management team called the Gavin Group has an NHL tax calculator.

Tax Calculator | Gavin Group

Obviously, should you employ their services your expected tax/deduction savings should increase from what they've provided you.

 

[Burke the Legend]

Not to mention the importance of signing bonuses to players who are in States with No State Income Tax. That will be deemed earned in that No Income Tax State whereas salary is deemed earned in the state where the game in played for the Jock Tax.

Plus, with Escrow, players are going to have to submit adjustments for their taxes. Like when the NHL refunded the players a portion of their escrow payments for the 18-19 season earlier this year. Player may need to declare taxes on their salary before escrow and then submit escrow deductions to get a refund back on their taxes. Every player needs a professional to handle that for them.

I think signing bonuses are taxed favourably in Canada too. At least Ontario I believe I've read.

 

[LeHab]

Forbes had a good write-up on how Tavares may minimize taxation:

John Tavares Could Save Nearly $12 Million In Taxes On His New Contract

As already stated in the thread, many factors come into play.

 

[LeHab]

He's getting 427,098 net from 820,659 gross. The 2,244,370 is year to date I believe gross.

Correct, this is biweekly pay stub but also lists YTD earnings. In addition to these deductions, player likely has an agent taking a cut from gross income. Going rate for a top MLB agent like Scott Boras is around 5%.

 

[Golden_Jet]

Andrew McCutchen pay stub, should be similar for hockey players:

There is such a thing a Pittsburgh athlete tax, first I heard, is this other cities as well.

 

[LeHab]

There is such a thing a Pittsburgh athlete tax, first I heard, is this other cities as well.

Pittsburgh would prefer you call it a "fee". There is actually a lawsuit contesting this fee to be in fact a discriminatory tax. Athletes residing outside of the city pay a higher rate than those living in.

https://www.si.com/nhl/2019/11/27/pittsburgh-jock-tax-scott-wilson-kyle-palmieri

Pay stub also shows a St Louis deduction which seems similar. Found more details here: Game Misconduct: St. Louis Widens Jock Tax | Tax Foundation.

Many states have those so called jock taxes but don't know much about individual cities.

 

[SupremeNachos]

I think Marco Scandella had a piece written about him in The Athletic a while ago about this. He was making 4m a year and was taking home a little over 1m after taxes, agents, meals, family spending, misc.

 

[alko]

...family spending...

Whats that? Didnt you earn money to spend it for family? General.

 

[Jumptheshark]

With all the varying tax rules in different countries, states and provinces there is no one answer.

Also, we do not know how much % some players pay their agents. While some players handle their own finances, other players have their agents company do everything from their taxes, to long term planning and other stuff like that. While some players no longer have an agent and do everything themselves

 

[StreetHawk]

I think Marco Scandella had a piece written about him in The Athletic a while ago about this. He was making 4m a year and was taking home a little over 1m after taxes, agents, meals, family spending, misc.

Players, like all people have to pay taxes. Agent fees, yes they need to pay that, generally around 3% or so. Is that considered deductible for tax purposes?
Taxes and agent fees I could see taking upwards of 50% of the salary, and after you factor in 15% or whatever of escrow that gets withheld until final payment is received, then it does add up. 15% of $4 mill is $600K, for example, so he's working on $3.4 mill after escrow. As Mouser mentioned, if players are permitted to delay tax filings on Escrow until the final number is complete, then they at least get to keep that $200-$300K of taxes of the escrow until the final numbers come in. So, if escrow finishes at 10% instead of 15%, then he gets back $200K and would then owe taxes on that.

Not sure what he is including in that meals, family, spending, but if that's how he chooses to spend his money, that's his personal choice. On preliminary gross pay of $3.4 mill, then after taxes and agent fees should still come in at least $1.5 million for an NHL player. And he could get back another $100K to keep after escrow gets finalized. If he's spending $500K after that, that's the lifestyle he chooses to live.

 

[SupremeNachos]

Whats that? Didnt you earn money to spend it for family? General.

Family spending as in buying a new vehicle or building a new deck. Not necessarily just giving cash to family members for them to use for w/e.

 

[SupremeNachos]

Players, like all people have to pay taxes. Agent fees, yes they need to pay that, generally around 3% or so. Is that considered deductible for tax purposes?
Taxes and agent fees I could see taking upwards of 50% of the salary, and after you factor in 15% or whatever of escrow that gets withheld until final payment is received, then it does add up. 15% of $4 mill is $600K, for example, so he's working on $3.4 mill after escrow. As Mouser mentioned, if players are permitted to delay tax filings on Escrow until the final number is complete, then they at least get to keep that $200-$300K of taxes of the escrow until the final numbers come in. So, if escrow finishes at 10% instead of 15%, then he gets back $200K and would then owe taxes on that.

Not sure what he is including in that meals, family, spending, but if that's how he chooses to spend his money, that's his personal choice. On preliminary gross pay of $3.4 mill, then after taxes and agent fees should still come in at least $1.5 million for an NHL player. And he could get back another $100K to keep after escrow gets finalized. If he's spending $500K after that, that's the lifestyle he chooses to live.

1.5m is a bit high. If he listed Buffalo as his residence then he would lose a bit over 1.75m from state taxes alone. So a little over a million ie 1.2-1.3M isn't an exaggeration.

 

[JKM]

Pro Athletes’ Taxes Based on Where Their League Resumes Play (1)

"American NHL players playing out their seasons in the league’s two hub-designated cities in Canada of Toronto and Edmonton, Alberta province, could be on the hook for double the taxes.”