Income and money in general are usually not things, that professional athletes have to worry about daily, unlike the rest of the population. The superstar players among them take home tens of millions and even the role players and bench warmers earn steady millions in the process.
Still, these players are no exception to the one thing that plagues the bank accounts of every citizen living in most countries. Taxes. Even a player like LeBron James has to pay his due 37% to the American government among other taxes.
The way the American tax system is structured, different states have different levels of federal tax that are applied to salary. For example, New York is the state with the highest tax bracket coming in with 12.47% whereas Alaska has the lowest tax bracket with a measly 5.06%.
Unfortunately for NBA players, Alaska currently does not feature an NBA team. Notably, the state with the lowest federal tax that does possess an NBA team is Florida with 6.33% and Florida has two teams, i.e. the Miami Heat and the Orlando Magic.
Jimmy Butler is one of the highest-paid NBA players after taxes
You read that correctly. This fact may come as a surprise due to Butler’s relative understatement compared to other superstars. At least that was before this season’s playoffs. It all hinges on the fact that Butler plays for the Miami Heat, which represents the state of Florida along with the Orlando Magic.
This means that although Butler only collects the 11th highest salary in all of the NBA, $45,183,960, due to him being in Florida he pays $16.72 million in federal taxes and 0 dollars in state tax, as Florida is a zero state tax federation.
Jimmy Butler’s income after taxes 😲
$45.18M: Salary (’23-24)
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$16.72M: Federal Tax
$0: Florida Tax
$1.36M: Agent Fee
$680k: Jock Tax
$420k: FICA
=
$26M: Net Income pic.twitter.com/G1Xtsr7CHv— Andrew Petcash (@AndrewPetcash) June 6, 2023
Athletes such as NBA players also have to pay the somewhat insultingly named ‘Jock Tax.’ It is a tax levied against individuals who travel to other cities and earn a portion of their income there. So when the Miami Heat visit Dallas to play the Mavericks, a certain amount of tax is billed up against every player of the Heat which they must pay.
Over the course of an NBA career…
Playing in Texas, Tennessee, or Florida can 𝘴𝘢𝘷𝘦 a player millions of dollars in taxes. pic.twitter.com/iKl7wd5W3T
— Andrew Petcash (@AndrewPetcash) June 6, 2023
Now comparing Butler’s financial situation to that of his NBA finals opponent Nikola Jokic, we can see that Butler earns a stifling $2 million after taxes more than Jokic. Now in NBA terms that may not seem like much but in day-to-day life, $2 million is more than some people make in their lifetimes.
Butler’s annual salary comes to $26 million but Jokic’s comes to $24.32 million due to his slightly higher federal taxes and most importantly, the $2 million that he has to pay to the state of Colorado.
