Top Earning (And Top Taxed) Athletes
For athletes across the world, the more salary and endorsements, the bigger the tax liabilities. Last year alone, the highest paid athletes across the globe earned a collective paycheck of $3.15 billion.
Here’s a short list outlining some of their salaries, and some of their known tax burdens.
LeBron James - $23.2 million salary, $54 million endorsements
While James has a in Florida, a state with no state withholding tax, he can’t escape the 'jock tax', which levies state taxes on 18 of the states he plays in. The 'jock tax' is an income tax levied against visiting athletes (and other members of an athletic organization) to the city or state in the corresponding jurisdiction. Simply put, if James plays in California, he’s subject to that state’s withholding tax. Because of this, he had a combined federal, state, and local tax burden of $17 million, at a maximum rate of 39.6%.
Floyd Mayweather - $300 million combined
The biggest income grosser of any recent athlete means Mayweather is also the biggest taxpayer. His $300 million winnings from recent years dwindled (if that’s even an appropriate term) to $220 million after taxes. Taxed at the same rate as James (39.6%), he owned a cool $120 million in taxes for beating Manny Pacquiao.
Roger Federer - $7.8 million salary, $60 million endorsements
Living in Wollerau, Switzerland has proved fruitful for tennis legend Federer. Wollerau boasts one of the lowest tax-municipalities in Europe, helping Federer keep more of his earnings year over year. The rate - 11.56% - took $7 million from Federer, considerably low in comparison to some of his American counterparts.
Like others on this list, Spieth is in the 39.6% tax bracket, meaning that’s the rate of which his earnings are taxed. Since going pro in 2012, the golf prodigy has earned $147.5 million, with taxes amounting to $58 million. Expenses, such as caddie and other employee payroll, took another $14.7 million.
Newton, who’s led the Carolina Panthers to Super Bowl appearances and wins, earned a hefty paycheck. But with it - an equally hefty tax bill. Due to the jock tax, Newton’s tax bill topped out at $8.4 million.
McCutchen made the jock tax more visible to the public eye when he accidentally left a pay stub in a visiting locker room, only to be discovered and posted to Reddit. In 2015, he earned $427,098.49 in one bi-weekly paycheck. With over 20 deductions taken from his check, he paid $13,029.82 in taxes from that single check. Because of different rates for different cities, his tax burden was either higher or lower each two-week period.