Salary Cap (Taxes)

[Matthews4Calder]

Just curious if someone can explain salaries and how they pertain to the salary cap regarding players in Toronto vs say TB.

Read somewhere where all players are paid in US dollars but because of the higher taxes in Canada are we not at a disadvantage when signing players.

I’m a Leaf fan and not crazy about the Marner deal nor Matthews. But are we paying higher salaries to justify the taxes. If so how fair can that be in a salary cap world?

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[Krewe]

The differences are very overhyped. There is a difference but it isn't millions per year per player.

Also, the salary cap is for cost certainty, not for parity, so at the end of the day, fairness doesn't matter.

 

[adsfan]

You have a slight advantage if you are in Florida, Nevada, Tennessee, Texas or Washington.

I don't think it makes any difference in Alaska, South Dakota, New Hampshire or Wyoming since they don't have NHL teams.

9 States With No Income Tax

 

[Muikea Bulju]

You have a slight advantage if you are in Florida, Nevada, Tennessee, Texas or Washington.

I don't think it makes any difference in Alaska, South Dakota, New Hampshire or Wyoming since they don't have NHL teams.

9 States With No Income Tax

You also have a gigantic advantage in Tennessee with Signing Bonuses

 

[Beukeboom Fan]

The differences are very overhyped. There is a difference but it isn't millions per year per player.

A rough equivalent of 9.5M in Tampa is 10-10.25M in Toronto. (I swear to god if someone tried to use the clearly wrong CF calculator as proof it's more I'm gonna be so disappointed). If someone doesn't, believe me, I can (yet again) run through the numbers. If you read some of the Brayden Point Threads on the Trade Board, I've gone over the differences.

Also, the salary cap is for cost certainty, not for parity, so at the end of the day, fairness doesn't matter.

Agree 100%. People who don't understand taxes think it is as easy as saying (CAN + ONT vs. US + FLA). That isn't how it works, because players get taxed wherever the game is played. So a Maple Leafs player doesn't get taxed when playing a game in FLA just like a Lightning player. Obviously the Bolts and Panthers players play more games in FLA so they get a bigger benefit, but it isn't like they never pay state (or provincial) income taxes.

People think that the cap was put in primarily for parity purposes (actually for cost certainty), which isn't the case because if it was everyone would have to have their salary at the midpoint.

 

[Empoleon8771]

It's a way overstated thing so that fans of Canadian teams can complain about how they deserve to get advantages to compensate for what they think are advantages of other teams. In reality the earning system in pro sports is ultra complicated and a lot more in depth than "players who play in Florida pay less taxes than players who play in Ontario".

 

[nturn06]

So to sum it up, unless I am mistaken, only in one season a team from a tax heaven state won the Stanley cup...

So the myth that the poor Leafs are getting screwed by the taxes is just a myth.

 

[Mickey Marner]

A wealth management team called the Gavin Group has an NHL tax calculator.

Tax Calculator | Gavin Group

Think of this as the max you could pay.

The max bonus structure the Leafs use off-sets any tax haven by potentially millions.

Tavares has nearly made as much money with the Leafs as he did with the Iles. Possibly more if he invested the bulk of it.

 

[Filthy Dangles]

Tax advantage leading to a bunch of more take home pay is a fallacy.

There’s a ton of nuances. Like how much of the salary is payed in signing bonuses vs salary. And salary is taxed according to income tax rates where the game is played, iirc.

And big markets with higher tax rates might afford you to earn more money in endorsements and advertisements vs smaller markets

 

[Krewe]

A wealth management team called the Gavin Group has an NHL tax calculator.

Tax Calculator | Gavin Group

Think of this as the max you could pay.

The max bonus structure the Leafs use off-sets any tax haven by potentially millions.

Tavares has nearly made as much money with the Leafs as he did with the Iles. Possibly more if he invested the bulk of it.

Why does every NHL Tax calculator just use local taxes? It really wouldn't be that hard to set it up properly.

But basically, half the differences that the calculator links and that'll give you a better idea.

 

[Edgelord]

Why does every NHL Tax calculator just use local taxes? It really wouldn't be that hard to set it up properly.

But basically, half the differences that the calculator links and that'll give you a better idea.

so I wonder how a 10 mil salary in Tampa compares to a 750k salary+9.25mil bonus in Toronto

 

[LongWayDown37]

Toronto fan whining about What their team pays players..... good grief, go to bed.

 

[Edgelord]

Toronto fan whining about What their team pays players..... good grief, go to bed.

but Mom its only 8

 

[Mickey Marner]

Why does every NHL Tax calculator just use local taxes? It really wouldn't be that hard to set it up properly.

But basically, half the differences that the calculator links and that'll give you a better idea.

That calculator is the equivalent of a contractor offering "free estimates". It exists to facilitate making money, not accuracy.

 

[Krewe]

so I wonder how a 10 mil salary in Tampa compares to a 750k salary+9.25mil bonus in Toronto

Depends on how much the player wants to save. Matthews is getting that 15M signing bonus with AZ taxes. I would assume every player has accountants that will help them save money, and the signing bonus gives them more flexibility to do so. But yes, if they just took the SB on face value and didn't do anything, then having all SB would actually lose them money unless they invest it.

 

[Edgelord]

Depends on how much the player wants to save. Matthews is getting that 15M signing bonus with AZ taxes. I would assume every player has accountants that will help them save money, and the signing bonus gives them more flexibility to do so. But yes, if they just took the SB on face value and didn't do anything, then having all SB would actually lose them money unless they invest it.

apparently Matthews has spent some of that money on upkeep on the new stache. Hope he grows it out to a big horseshoe mustache, hell he could wear a sombrero for a helmet if he scores 50 lol

 

[Matthews4Calder]

Toronto fan whining about What their team pays players..... good grief, go to bed.

I’m not whining. Simply want to know are the Canadian teams paying more because of the taxes. If so how fair is that? If a player like Marner was playing in TB could he have signed for a bit less? That’s my question. Or is Dubas just overpaying?

 

[LongWayDown37]

I’m not whining. Simply want to know are the Canadian teams paying more because of the taxes. If so how fair is that? If a player like Marner was playing in TB could he have signed for a bit less? That’s my question. Or is Dubas just overpaying?

Toronto and Canada are hardly the only ones in markets where players are getting taxed more than Tampa. Ask the rangers, islanders, sharks, blackhawks, King’s, Sabres, bruins, ducks, red wings, etc...

This has been a consistent whine from Leaves fans. The reality is that you’re hardly special. Get over yourselves.

 

[TheDawnOfANewTage]

1) Dubas is just overpaying.
2) It isn't totally fair, but that's the world for ya. I don't think it's a big enough difference maker to worry about. SJ is pricey AF but I'd think it'd have a lot of other aspects that entice players. Same idea with Toronto. Some guys might not like Buffalo, but I don't think it's the taxes scaring them off.

 

[End on a Hinote]

Toronto and Canada are hardly the only ones in markets where players are getting taxed more than Tampa. Ask the rangers, islanders, sharks, blackhawks, Kong’s, Sabres, bruins, ducks, red wings, etc...

This has been a consistent whine from Leaves fans. The reality is that you’re hardly special. Get over yourselves.

Haha damn autocorrect

But as a fan of a Canadian team, it's nice to know that the whole "players get taxed heavily in Canada" belief is exaggerated. I was ignorant about it and always assumed that was one if the biggest reasons why no Canadian team won a cup in 26 years.

 

[Matthews4Calder]

Toronto and Canada are hardly the only ones in markets where players are getting taxed more than Tampa. Ask the rangers, islanders, sharks, blackhawks, Kong’s, Sabres, bruins, ducks, red wings, etc...

This has been a consistent whine from Leaves fans. The reality is that you’re hardly special. Get over yourselves.

All I’m saying is in a cap world how fair can that be when taxes range from 30 percent to 50 percent from Dallas to anywhere in Canada? And I’m defending players in some US states with higher taxes. My question was because of higher taxes in some states or provinces are and do players ask and get more due to the take home being less?

 

[LongWayDown37]

All I’m saying is in a cap world how fair can that be when taxes range from 30 percent to 50 percent from Dallas to anywhere in Canada? And I’m defending players in some US states with higher taxes. My question was because of higher taxes in some states or provinces are and do players ask and get more due to the take home being less?

Why is it that only Leafs fans ever complain about this?

 

[93LEAFS]

1) Dubas is just overpaying.
2) It isn't totally fair, but that's the world for ya. I don't think it's a big enough difference maker to worry about. SJ is pricey AF but I'd think it'd have a lot of other aspects that entice players. Same idea with Toronto. Some guys might not like Buffalo, but I don't think it's the taxes scaring them off.

The issue with places like Toronto, NYC, and the Bay Area, is not only are taxes expensive as hell, its also the real-estate costs. What 3 million USD buys you in places like Western New York and Tampa are very different than what it would buy you in Manhatten or Toronto. What Toronto has going for it is being home for a lot of NHLers, the relative prestige (iconic franchise, even if they haven't been successful for 50 years), and marketing money (which agents get a way large share of than players NHL contracts).

I will say, Tampa and teams that play in places with no state-tax only really have an advantage when buying up UFA years. Guys like Stamkos didn't take a discount until their 2nd contract, the reason for that is, it would be stupid for an agent to advise players to take a significant discount with Tampa, while they don't have a full NTC. I think that in part is holding up the Point negotiation. They point (no pun intended) to Kucherov as their ceiling, but Kucherov is fully protected against trade, something Tampa can't guarantee to Point until 4 years from now.

 

[TheDawnOfANewTage]

The issue with places like Toronto, NYC, and the Bay Area, is not only are taxes expensive as hell, its also the real-estate costs. What 3 million USD buys you in places like Western New York and Tampa are very different than what it would buy you in Manhatten or Toronto. What Toronto has going for it is being home for a lot of NHLers, the relative prestige (iconic franchise, even if they haven't been successful for 50 years), and marketing money (which agents get a way large share of than players NHL contracts).

I will say, Tampa and teams that play in places with no state-tax only really have an advantage when buying up UFA years. Guys like Stamkos didn't take a discount until their 2nd contract, the reason for that is, it would be stupid for an agent to advise players to take a significant discount with Tampa, while they don't have a full NTC. I think that in part is holding up the Point negotiation. They point (no pun intended) to Kucherov as their ceiling, but Kucherov is fully protected against trade, something Tampa can't guarantee to Point until 4 years from now.

That's why I used the SJ example- it has a lot going for it, so the real estate costs are easier to bear. Buffalo is cheap, but.. I like it, but it's not for everyone.

Also, I think the real estate aspect is a bit overblown- it's an investment you can potentially make money on. NHLers have the money to do it, and I'd be willing to bet housing in major cities is even more expensive in 5 years- buy yourself a place and profit.

 

[AnCatDubh]

Agree 100%. People who don't understand taxes think it is as easy as saying (CAN + ONT vs. US + FLA). That isn't how it works, because players get taxed wherever the game is played. So a Maple Leafs player doesn't get taxed when playing a game in FLA just like a Lightning player. Obviously the Bolts and Panthers players play more games in FLA so they get a bigger benefit, but it isn't like they never pay state (or provincial) income taxes.

People think that the cap was put in primarily for parity purposes (actually for cost certainty), which isn't the case because if it was everyone would have to have their salary at the midpoint.

This isn’t true. A Maple Leafs player still gets taxed in Canada for games they play in the US. The jock tax is an additional layer of tax. When you are a resident of a state with no state income tax, the jock tax will increase your effective tax rate because you will be required to pay the jock tax for your away games. For a Canadian resident they would still pay the jock tax and it would reduce the amount of tax they paid in Canada, but the tax reduction (foreign tax credit) would be limited to the amount of jock tax they paid. At the end of the day an Ontario resident will still pay 53% tax regardless of how many away games they play in the US.