How Much Do Athletes Pay In Taxes?

In professional sports, the winner takes all the goodies. Yet, those who earn the highest wages and endorsement deals also have to pay the highest taxes.

Tax figures for private individuals are rarely made public. However, most high-paid athletes like Cristiano Ronaldo ($136M), Lionel Messi ($130M), LeBron James ($119.5M), and Roger Federer ($95.1M) are subject to the maximum tax rate in the United States. 

Read the full article to discover how these athletes keep the economy running.

Highlights of the Article

• Basketball star Stephen Curry owed the most state taxes in 2017.
• 2016-2017’s highest tax-paying footballer was Lionel Messi.
• Roger Federer only paid $7 million in taxes.
• Single big earners’ maximum income tax rate earning $413,200 and above was 39.6%.
• $2.7 million was saved by Tyreek Hill in his 2022 taxes.
• Dak Prescott had the highest gross and net income pay in 2021.
• California collected $229 million from athletes in one year.
• Spain’s top tax rate is 52%.

Statistics Overview on Athlete Tax Payments

Apart from the state and federal taxes, professional athletes also pay the jock tax in every state where they compete and earn money.

These are the player’s average non-resident state tax returns filed:

• NFL: 8-12
• NBA: 16-20
• MLB: 20-25

Here are some facts about professional athletes‘ taxes in every sport that you may not have known about:

Athletes Tax Payment By Sports

It’s interesting to note that 26 of the top 30 American athletes who pay the highest taxes play in the NBA or NFL. This highlights the size and popularity of basketball and football in the United States.

Here are some athletes with newly-extended contracts in 2022:

• Aaron Judge (Yankees): $360 million, 9-year contract
• Patrick Mahomes (Kansas City Chiefs): $503 million, 10-year contract
• Lionel Messi (FC Barcelona): $673.9 million, 4-year contract

With these big paydays, professional athletes often face tax issues. Find out how much your sports idols are in trouble with the tax authorities.

1. Golden State Warriors’ Stephen Curry had the highest state taxes in 2017, with 11.8%.

(ESPN)

State taxes play a large part in determining the players’ take-home pay. Steph Curry goes from the 1st highest gross paid player to the 3rd highest net paid player. 

Curry’s California state taxes are to blame for this decrease in take-home pay. Look at the salary deductions of the top 5 highest-paid NBA players in 2017:

• Curry (11.8%)
• Griffin (11.5%)
• Lebron (6.5%)
• Hayward (4.5%)
• Millsap (4.2%)

2. Lionel Messi was the highest tax-paying footballer in 2016-2017.

(The Business Standard)

Almost half of Lionel Messi’s annual income went to the Spanish treasury. He had the highest contribution over big companies and 120,000 average Spaniards taxpayers combined.

Of his £121 million yearly salary, it is believed that £58 million is taxed. He also received a £69 million annual loyalty bonus and a £120 million renewal fee. Other assets, including his image rights, are not yet included in these numbers.

3. Tennis legend Roger Federer only owed a $7 million tax bill.

(TurboTax)

In 2015, Roger Federer was the fifth-highest-paid athlete. But by relocating to Wollerau, Switzerland, one of the lowest tax locations in Europe, he has given his tax situation the appropriate spin.

This should enable him to keep some of the $67 million earned and sponsorships received. With Wollerau’s low tax rate of 11.56%, Federer still paid over $7 million in taxes.

Athletes’ Tax Payments By Year

Professional athletes‘ staggering paychecks are envious, but little do fans know that behind these numbers comes great civic responsibility.

The highest-taxed athletes give up half or more of their earnings to pay taxes. In the 2022-2023 tax filing season, Patrick Mahomes filed 7 income tax returns, Shohei Ohtani (11), and Kevin Durant (18).

Look at these tax payments made by some athletes in a year.

4. In 2015, single big earners’ maximum income tax rate was 39.6% on income over $413,200.

(TurboTax)

Floyd Mayweather earned over $220 million when he beat Manny Pacquiao in a boxing fight but didn’t keep all of it. With almost $300 million in revenues, Mayweather earned the title of highest-paid athlete in 2015 but was also the biggest taxpayer.

5. Tyreek Hill saved $2.7 million in 2022 taxes.

(Huddle Up)

After the Kansas City Chiefs traded Hill in the 2021 offseason, he chose the Miami Dolphins over the New York Jets for tax reasons. It turned in his favor, as he saved $2.7 million by moving from New Jersey, with a 10.75% tax rate, to Florida’s 0%.

Here is Tyreek Hill’s 2022 Tax Breakdown:

• Jock Tax payments with Dolphins: $474,519 to away game states
• Jock Tax + state income tax payments with Jets: $3,191,968
• NJ state income tax payment: $2,984,409
• Jock Tax payments: $207,559
• Total 2022 savings: $2.7 million

6. Dallas Cowboys’ Dak Prescott topped in 2021 gross and net income pay.

(24/7)

The quarterback had a $107,500,000 gross income and took home a clean $65,230,000. Tennis icon Serena Williams was one of the boys on the list, with $25,200,000 net pay.

Athlete Tax Payments By Country

A game plan also extends to where athletes live and play, as it is a factor in their taxes. Those who reside in or represent teams in states with high taxes pay a higher tax percentage than other athletes.

It is an added cost for players who leave their homeland to carry out work-related duties. The top tax rates, ranging from 13% to over 50%, depend on the country.

Here’s a glimpse of the countries where your sports idols pay taxes.

7. California-based Stephen Curry paid about $1 million in taxes to 20 states in the 2018 NBA season.

(Huddle Up)

Stephen Curry might be on cloud nine as they won the NBA 2018 title, but the Jock Tax haunted him. Curry paid his taxes in California and other states, including:

• New York
• Massachusetts
• Minnesota
• Wisconsin
• Oregon
• Pennsylvania
• Indiana
• Michigan
• Ohio
• Georgia
• Illinois
• Louisiana
• Arizona
• Colorado
• Utah

Side Note

Although Connecticut isn’t mentioned in the list above, the Nutmeg State is among the biggest earning regions in the US regarding gambling taxation rates.

In 2023, CT taxed its online gambling user base around $53.14 million, which amounted to 15% of Connecticut’s total online casino revenue that year.

8. In 2013, California collected $229 million in taxes.

(Huddle Up)

Athlete taxes alone bring in hundreds of millions annually, including California’s $229 million in 2013. 

These players reside and play in the notoriously high-tax states of California:

• Footballers: Joey Bosa, Jalen Ramsey, and Aaron Donald
• Basketball stars: Stephen Curry, Russell Westbrook, and LeBron James
• Golfers: Tiger Woods and Phil Mickelson

9. The top tax rate in Spain is 52%.

(The Business Standard)

With a 52% tax rate, Ronaldo requested a new deal with Real Madrid last season. He now earns £288,000 per week after taxes, meaning Real Madrid had to pay about £600,000 weekly to have Ronaldo in their squad.

Conclusion

While it’s an ego boost to be on the list of highest-paying athletes, taxes hurt big time. The average salary in professional sports has significantly increased over the years, making these taxes more lucrative for each state. Hats off to the athletes!