It’s safe to say most people are watching the Olympics – or at the very least, eyeing the medal count by country. After all is said and done and we’ve marveled at the athletic feats of our favorite swimmers, runners, and gymnasts – we’re curious about the money.
How much is an Olympic medal worth? And more specifically – how much of that cash prize is taxed? We know you’re wondering, too.
For Americans, winning a gold medal comes with a $25,000 pay out. It’s a good thing elite athletes like Michael Phelps have multiple endorsements, including partnerships with Under Armor and Speedo, because that money is taxed a little differently. In fact, because he won it in Rio de Janeiro, it’s subject to what the IRS calls 'earned income abroad' or 'income from abroad.'
If you fall into a high tax bracket, like Phelps would, that earned income is taxed at 39%, making his $25,000 drop to $15,250. However, for those in the lowest tax brackets (which, generally is more of the newer Olympians), their gold medals are taxed at 10%. That means they’ll go home with the gold and $22,500. In addition to these taxes, medals are taxed on commodity prices, too. The range for this is around $600 for gold and $300 silver. For some athletes, like those competing from New York or California, their medals are subject to state tax as well.
How does the U.S. compare on the federal level? Other nations do not tax their Olympians, while some don’t provide any type of monetary winnings. This practice may occur to make tax filings easier, or to give their tax collectors a break. In the U.S., if you’re caught hiding your foreign income, you face penalties, fines, more taxes, or even imprisonment. So let’s hope our athletes are filing their earnings correctly!