How Much Tax Money Does A State Make Off Of An Nfl Team
Professional person football game players lead enviable lives. The pro athletes on an NFL roster make a minimum of $435,000 per year, approximately 10 times the U.Southward. median income. The top earners get paid over $20 1000000 per year. While that income guarantees a certain level of financial security and textile comfort, at that place's at to the lowest degree one twenty-four hour period of the year that NFL players don't become to relish: revenue enhancement day.
Endeavour SmartAsset's loftier-powered income tax reckoner.
As loftier earners, NFL players face height taxation rates at the federal and local level. In some places, these marginal rates exceed fifty%.
But information technology doesn't terminate there. In addition to paying taxes to the IRS and their home team's land, many professional football players have to pay taxes to every single country in which they play a game, the so-called "jock tax." That can mean filing as many as 10 different tax returns and coughing up as much as 50% of their bacon and bonuses in taxes.
To estimate the tax bills for the top-earning NFL players, SmartAsset ran salary and bonus information from overthecap.com (authentic equally of time of writing) through the income taxation model that drives our federal, state and local income tax figurer.
We calculated the federal, country and local taxes for the two highest-paid players on every NFL team. Our analysis also incorporated taxes paid to usa and cities of away-game opponents, likewise as applicable deductions, credits and exemptions. (Read more about our methodology below.)
Key Findings
- California hits hard. Athletes who play for 1 of the NFL's three California teams pay a marginal tax rate of thirteen.3%, the highest state-level taxation in the country. For that reason, players on those teams give up more than of their income in taxes than players anywhere else in the country. Phillip Rivers, QB for the San Diego Chargers, has the highest effective tax rate of any NFL thespian, according to our analysis.
- AFC South is the virtually tax-friendly NFL partition. While on-field results for the four teams in the AFC South have been mixed this season, they are clear winners of the tax bracket. Iii of the four teams play in states with no tax on regular income (Texas, Florida and Tennessee), which means no jock taxes on away games. Taxation bills for players on Houston, Jacksonville and Tennessee are amid the lowest in the league.
- AFC W is worst for taxes. With ii teams in California and some other in Kansas Urban center (where in that location are both state and local taxes), the AFC Due west is the worst division for abroad-game jock taxes.
NFC Due east
New York Giants
New York Metropolis has some of the highest taxes in the land, with marginal rates reaching 12.7% when including both the land income tax and city income revenue enhancement. The good news for players on the Giants: they don't really play (or practice) in New York. The Giants' stadium and practice facility are located in New Jersey.
Instead of paying New York taxes, Giants players face the moderately lower tax burden of the Garden State. That ways that Jason Pierre Paul and Eli Manning (the top two earners on the Giants for 2015) pay a "mere" 46.6% of their NFL income in taxes, instead of the over fifty% charge per unit they would pay in NYC. (Note: Our analysis was done before JPP's newest and smaller contract.)
Dallas Cowboys
America'southward Team is a dream destination for whatever football game player. The 'Boys have the largest stadium, the biggest fan base of operations and a make with international appeal. They also pay some of the lowest taxes. That's because Texas has no state or local income taxes.
Washington
Washington doesn't actually play in Washington, D.C., which means that players on the team avoid the urban center'southward 8.95% elevation tax charge per unit. Furthermore, while their dwelling games occur in Maryland (where the total state and local tax rate is likewise viii.95%), they practice in Virginia, which has a top rate of 5.75%. Thanks to a reciprocal agreement between Virginia and Maryland, the team's players probable do not accept to pay any Maryland taxes whatsoever.
Philadelphia Eagles
Among states with an income tax, Pennsylvania's flat 3.07% rate is one of the lowest. Unfortunately for Eagles players, they likewise accept to pay a 3.92% tax to the city of Philadelphia. That's in addition to the jock taxes paid to other states.
Jock taxes in Atlanta, Massachusetts, Detroit and Northward Carolina also tack on an additional $97,000 to quarterback Sam Bradford'southward taxes and $61,000 to offensive tackle Jason Peters'due south taxes, co-ordinate to the SmartAsset tax model. In sum, that leads to effective rates of only over 46%.
NFC Due north
Green Bay Packers
The sectionalisation-leading Packers have ane of the highest-paid players in the league in Aaron Rodgers. Rodgers will earn virtually $18.2 meg in salary and bonuses for the 2015 season but after paying federal and state taxes equaling 46.4% of his income, he'll have "but" $10 million left, co-ordinate to our tax model. (Note: that does not include income earned for his State Subcontract commercials, information on which is not publicly bachelor.)
Minnesota Vikings
After California, Minnesota is the highest-tax venue for NFL players. The country's elevation marginal charge per unit is 9.85%. For someone like Adrian Peterson, who earns over $xv million per year, that means more than than $1 meg annually in state taxes solitary.
Chicago Bears
Chicago is the land'southward third largest urban center, but it ranks nowhere near the pinnacle when it comes to income taxes (property taxes are another story). The state income taxation rate in Illinois is iii.75% and the city has no local income revenue enhancement. Nonetheless, thanks to high federal taxes, Jay Cutler and Matt Forte pay an estimated 44% and 43.5% of their income in taxes respectively.
Detroit Lions
Calvin Johnson is the NFL'south highest-paid receiver, earning more $20 million per year. He's known for out-muscling DBs to snare tough catches, simply not even Megatron can beat out the Taxation Man. SmartAsset estimates that near half his playing income – 46.1% to be exact – goes to taxes.
The largest recipient is the IRS, only the state of Michigan and the metropolis of Detroit besides taxation residents at rates of 4.25% and 2.4% respectively. (QB Matt Stafford earns slightly less than his top wideout only nevertheless pays an effective tax rate of 46%.)
NFC Southward
Atlanta Falcons
The Falcons are one of the surprise teams of 2015. Matt Ryan to Julio Jones has been the league'due south near lethal QB-receiver combo. They are besides one of the highest paid pairings, earning $31.9 million together this season.
Thanks to a fairly moderate income tax in Georgia (the top rate is 6%) they get to keep more than of that income than many other top NFL players. Overall, however, they are withal paying an estimated $14.4 one thousand thousand combined in income taxes on their NFL earnings alone.
Carolina Panthers
Over the by several years, Due north Carolina'due south income tax shifted from a progressive revenue enhancement with rates equally high equally 7.75% to a flat revenue enhancement with rates at 5.75%. That shift has likely meant hundreds of thousands of dollars in tax savings for players on the Carolina Panthers.
Charles Johnson and Cam Newton volition pay an estimated $9 meg and $5.viii million, respectively, in total taxes on their 2015 income. Cam will be seeing his tax pecker rising next season when he enters the beginning year of a new contract (every bit will linebacker Luke Kuechly).
Tampa Bay Buccaneers
It'south looking similar another disappointing flavour for the Bucs just the players tin take solace in the fact that they pay some of the NFL's lowest taxes. The Buc's highest-paid players surrender about 43% of their income in taxes.
That number would be lower if non for an away schedule that features seven states which collect an income tax of their own. For example, SmartAsset estimates that Gerald McCoy will pay over $240,000 in income taxes to the home states and cities of his abroad-game opponents.
New Orleans Saints
This is the last season in which Drew Brees qualifies as the summit-earning NFL actor (Aaron Rodgers looks to claim that title next twelvemonth). Despite moderate tax rates in Louisiana (the top rate is 6%), he also has the largest overall taxation bill in SmartAsset'due south assay. We estimate that Mr. Brees volition pay $11.7 one thousand thousand in land and federal taxes.
NFC W
Arizona Cardinals
Income taxes in Arizona are fairly low, topping out at simply 4.54%. That's proficient news for Patrick Peterson, 1 of the league's best and about well remunerated defensive backs. He volition pay an estimated effective tax charge per unit of 44.7% on his 2015 income, below average for top NFL players.
Saint Louis Rams
Tax cuts in Missouri will reduce the country'due south top income taxation rate from 6% to 5.v% in coming years. That ways big savings for Rams players. For example, defensive lineman Robert Quinn will pay an estimated $969,000 in state taxes on his $sixteen.74 million in 2015 income. At a top charge per unit of 5.v%, he would pay closer to $885,000. That'due south $84,000 in savings, plenty for a new Lexus!
Seattle Seahawks
The Hawks have been one of the NFL's hottest teams in contempo years. 2 consecutive Super Basin appearances have helped them depict top costless agent talent like Percy Harvin (in 2014) and Jimmy Graham. Some other reason free agents love Seattle? The taxes. Washington State has no personal income tax.
The flipside of that is that when the Seahawks get out the confines of vaunted CenturyLink Field, they have to cough up large dollars to their away-game hosts thanks to the jock tax. Richard Sherman, for example, will pay an estimated $241,000 in additional income taxes to other states in 2015, highest of whatsoever player in the NFL.
San Francisco 49ers
It'southward been a rough season for the 49ers, who are breaking in a new stadium with i of their worst seasons in years. The one bit of good news (for players, not fans)? The location of that new stadium means they'll all pay lower taxes this season.
Thinking nearly a move to San Francisco? Find out what your taxes volition be with SmartAsset'due south California tax calculator.
The city of San Francisco levies a city income tax of 1.five% against people who live or piece of work inside city limits. Since the squad's new park is non in San Fran but in Santa Clara, most players will no longer have to pay that tax. That has likely saved Colin Kaepernick, who earns over $15 million per yr, more than $200,000 in taxes.
AFC Eastward
New England Patriots
The dynastic Patriots show no signs of slowing down this flavor, with Tom Brady & Co. steamrolling most of their opponents to date. One adversary confronting which they don't stand a run a risk, however, is the IRS. SmartAsset estimates that Brady will pay $6.27 one thousand thousand in taxes on his football income lonely this twelvemonth. Nearly 90% of that will go to the federal authorities.
Based on his NFL income, Brady will "only" have to file revenue enhancement returns in 5 different states this yr (Massachusetts, New York, Indiana, New Jersy and Colorado). He benefits from a schedule that features two away games in tax-gratuitous Texas and another in Florida.
New York Jets
The Jets, like the Giants, save their players a fairly substantial sum of tax dollars by playing in New Bailiwick of jersey rather than the metropolis of New York. If, for case, the Jets played in Queens, they would face up a elevation country and metropolis tax rate totaling 12.vii%.
Buffalo Bills
In New York State, just those who earn over $1,000,000 pay the state's top revenue enhancement rate of eight.82%. While that excludes the vast majority of the population and even many professional athletes, Bills players like Mario Williams and Marcell Dareus fall squarely into that top subclass. That means they pay some of the highest taxes in the league.
Miami Dolphins
The Dolphins fabricated a splash this off-season when they signed former Detroit Lion Ndamukong Suh out of free agency. Many speculated that Suh chose the Dolphins over his former team because his taxes would be significantly lower in Florida.
In that location may exist something to that. The top-earning Dolphins pay effective rates of 42.9% of their income in taxes. That'due south 3% lower than the taxes on Detroit players, representing hundreds of thousands of tax savings for players like Suh, who earn over $10 million per year.
AFC North
Cincinnati Bengals
The state of Ohio's tax rates tiptop out at 5.33% but Cincinnati collects its own urban center income taxation of 2.1%. That costs players like the Bengals' AJ Dark-green hundreds of thousands per yr in additional taxes. Overall, Green, who is i of the NFL's top receivers, will pay an estimated $6.8 1000000 in taxes on his 2015 income.
Pittsburgh Steelers
Professional athletes are subject to the "jock taxation," which means they may accept to pay income taxes in every state in which they play a game. Reciprocal agreements not to tax one another's residents between Pennsylvania and several other states may shield players on the Steelers from paying such taxes in states including Ohio (where they play two games this twelvemonth) and Maryland. That could mean tens or hundreds of thousands in tax savings for players like Ben Roethlisberger.
Cleveland Browns
Combined country and local tax rates in Cleveland tin exist as high equally 7.33%. While that pales in comparison to places like California or Hawaii (which, alas, has no NFL team), information technology still takes a clamper out of the income of top pro players.
Not that anyone feels sorry for them. Fifty-fifty subsequently giving up an estimated 46.1% of his income in taxes, Cleveland'southward Joe Haden is taking abode $6.iii million annually.
Baltimore Ravens
After California's three teams and Minnesota, Baltimore is the highest-tax team an NFL role player tin sign with. Indeed, Joe Flacco'southward estimated effective tax charge per unit of 47.2% ranks as the ninth highest in the league.
AFC S
Indianapolis Colts
While Colts players may not publically declare that they honey their division foes, they probably love where they play. Tennessee, Texas and Florida practice not collect state income taxes on regular income, which means Colts players avert the hated "jock taxation" for at least those three games every twelvemonth. That saves them tens if not hundreds of thousands of dollars in additional taxes every year.
Tennessee Titans
The land of Tennessee does non collect a personal income revenue enhancement (though it does revenue enhancement personal income from interest and investment dividends). Information technology briefly flirted with a revenue enhancement specifically targeted at professional person athletes but that tax excluded the NFL and was repealed in 2014. The outcome is that Titans players similar Jason McCourty pay some of the everyman taxes in the league.
Houston Texans
While JJ Watt doesn't take to pay any land or local taxes in Texas, he does have to coughing up some of his income when the Texans keep the route. The league's top defensive lineman can expect to file at least v tax returns in opponent territory, paying an estimated total of $165,513 in jock taxes.
Jacksonville Jaguars
The by few years have been rough on the Jags, who haven't had a winning season since 2007. It isn't all bad news, notwithstanding. Florida has no income taxation, which means Jaguars players bask some of the league's lowest taxes. Julius Thomas, for example, will pay an estimated 42.3% of his income in taxes this year – high for the average American, but depression for an NFL star.
AFC West
Denver Broncos
Colorado's flat income tax charge per unit of 4.63% is fairly low as compared with the top rates in most states. On the other hand, Peyton Manning and the rest of the Broncos have to play at least two away games in California every year (against Oakland and San Diego).
Indeed, Manning will pay nigh $400,000 in jock taxes on his 2015 income according to SmartAsset's analysis, though he can claim Colorado tax credits for about $265,000 of that.
Oakland Raiders
The good news for the Raiders is that halfway through the flavor they are still in the thick of the playoff race. The bad news is that whatever happens, come tax mean solar day they'll accept to pay tax rates that rank among the highest in the league. SmartAsset estimates that Oakland's Rodney Hudson will give up 49.viii% of his 2015 income in taxes, the third highest rate in the league.
San Diego Chargers
Phillip Rivers is completing almost 70% of his passes this flavor, which places him near the summit of the league for that statistic. He leads the league in another, more dubious category. According to SmartAsset'due south analysis, Rivers effective income tax on 2015 NFL income will exist 50%, the highest rate in the league. He'south the only player who will pay half of his income in taxes.
Kansas Metropolis Chiefs
According to Over the Cap, Alex Smith will earn $15.half-dozen meg in salary and bonuses over the grade of the 2015 flavor. He'll pay out an estimated $vii.2 million of that in taxes, including $900,000 to the state of Missouri and $156,000 to Kansas City.
He'll as well take to pay a jock tax to eight dissimilar abroad-game states and cities, including California, Minnesota and Maryland. Those will price him another $105,000.
Methodology
To guess the taxes paid by NFL players, SmartAsset fed bacon and bonus data from overthecap.com into the income tax model that powers our income tax calculator. The model incorporates nearly every single federal, country and local tax dominion that goes into a revenue enhancement return filed anywhere in the U.S. For instance, the model automatically applies the additional 0.9% Medicare payroll tax to high earners. (Effort information technology yourself!)
The income figures we used to calculate taxes were for NFL salary and bonus income but. We did non use sponsorship, investment or any other income, which is not frequently publicly available. Likewise, we used income for the 2015 flavour only (for contracts that were in existence at the time of this writing).
We allocated signing bonus income evenly over the grade of each player'south contract (so a player on a 3-twelvemonth contract with a $3 million signing bonus would get $ane million of that tacked on for this year). For players like Russell Wilson and Eli Manning, both of whom signed new contracts to begin next year nosotros used only income for this year's contract.
In order to calculate tax-burdens, we had to brand some assumptions with regards to deductions and exemptions. We assumed that every player would take the maximum $18,000 401(k) contribution. We assumed each player deducted agent fees of 3%, NFL Player's Association fees of $x,000 and abode mortgage involvement of $45,000 (approximately the maximum amount, though information technology will vary depending on involvement rate).
We besides incorporated each player's marital status. For players who are currently married, we assumed they would file jointly with their spouse. Unmarried players were treated as single filers.
Jock Taxes
SmartAsset'south analysis besides incorporates the taxes paid to u.s.a. and cities of away-game opponents, also known equally jock taxes. These taxes are calculated based on "service days," that is, the number of days spent working (practicing and then playing) in the state. And so, for example, if a player spends 17 days in a state and earns income on 170 days total of work, 10% of his income is taxable in that state.
We assume each abroad game was equal to 7 service days out of 170 total for the season. That ways a player with $10 meg in total income would have income of $411,764 in whatsoever away-game state. If he played two away games in that state, full income would be double that amount. To summate the jock revenue enhancement, we ran those income numbers through the tax model for each of the abroad-game jurisdictions.
The good news for most players is that their home-states allow taxes paid in other jurisdictions to be credited, and then that they don't pay double taxes on the aforementioned income. The credit is equal to the amount that was paid in the other jurisdiction or the corporeality that would have been paid on that income at habitation, whichever is lower. For players in high-tax venues such as California, that means these jock taxes add nothing to their full tax bill.
Nosotros calculated the total jock tax credit for each player and, lastly the internet jock revenue enhancement. That is the taxes paid in other jurisdictions minus the credits received at home. We combined that with the federal, state and local taxes on full income to arrive at each actor'south total tax bill.
Questions about our study? Contact us at blog@smartasset.com.
Photograph credit: ©istock.com/EdStock
Source: https://smartasset.com/taxes/nfl-jock-taxes
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