Series Talk: Tax implications

[usernamezrhardtodo]

If it’s well known why aren’t the Canadian GMs aware?

I am sure they are aware of it but if the player agent tells the player that they need extra compensation for having to fund an RRSP for the length of the contract without having real access to it...they pitch the extra money. That would be my guess.

 

[Nineteen67]

Taxation isn't an issue, the hard cap is.

The average state income tax is about 4.5% with California and NY outrageously high.

Yes, there shouldn’t be a hard cap, but I still don’t see why 7 million in Tampa automatically means 10 million in Toronto. I get players charging a tax to play in Toronto which seems like a bigger issue than the Ontario provincial income tax.

 

[usernamezrhardtodo]

One correction, some of the 41 away games are in no tax states.

And ask Tavares how his tax battle is going?

Tavares tried to say his signing bonus and upfront money were the same thing and got taken to task because he got them every year at the beginning. I am not sure of the details but seriously...if the no-tax states had a real advantage I would hope the league would step in...but they seem to think it's ok.

All I am saying is that this isn't what the Derren Dreger's of the world say when they talk about the huge tax differences...you can mitigate them with good planning but I suppose they would rather get more money...wouldn't you if you could?

 

[Nineteen67]

One correction, some of the 41 away games are in no tax states.

And ask Tavares how his tax battle is going?

This is why it’s impossible to adjust the cap based on tax rates. Simple solution is a league mandated luxury tax. Then everyone can complain when TTOE, NYR, BOS, PHILLY, CHI, VGK, et al., are always in the finals.

 

[thewave]

The average state income tax is about 4.5% with California and NY outrageously high.

Yes, there shouldn’t be a hard cap, but I still don’t see why 7 million in Tampa automatically means 10 million in Toronto. I get players charging a tax to play in Toronto which seems like a bigger issue than the Ontario provincial income tax.

Because the Canadian govt is not fiscally responsible. Unlimited natural resource wealth on crown lands and we can't even balance the books. We should be like the UAE and instead we aren't even equal to like England which is a hot mess.

it's a joke

 

[ULF_55]

The average state income tax is about 4.5% with California and NY outrageously high.

Yes, there shouldn’t be a hard cap, but I still don’t see why 7 million in Tampa automatically means 10 million in Toronto. I get players charging a tax to play in Toronto which seems like a bigger issue than the Ontario provincial income tax.

Yeah, state income tax rates vary more in the states.
Of course there are federal taxes in both countries.

California goes up the 13% ish

There is a reason that one player from California took deferred income so he can retire in a lower income tax state / no income tax state.

I just did a quick calculation for health insurance in Florida, for 2, $18k for a crappy plan.

For the rich, that's nothing.

 

[Nineteen67]

Because the Canadian govt is not fiscally responsible. Unlimited natural resource wealth on crown lands and we can't even balance the books. We should be like the UAE and instead we aren't even equal to like England which is a hot mess.

it's a joke

True, but no government is fiscally responsible. The complaint is some states don’t collect income tax ( they do collect other taxes) and im trying to understand why 7 million in Florida automatically 10 million in Ontario?
The federal tax rates are about equal.

 

[thewave]

True, but no government is fiscally responsible. The complaint is some states don’t collect income tax ( they do collect other taxes) and im trying to understand why 7 million in Florida automatically 10 million in Ontario?
The federal tax rates are about equal.

No state tax in FL. Aren't they paying effective like 20-30%

 

[Nineteen67]

Yeah, state income tax rates vary more in the states.
Of course there are federal taxes in both countries.

California goes up the 13% ish
View attachment 1049345

There is a reason that one player from California took deferred income so he can retire in a lower income tax state / no income tax state.

I just did a quick calculation for health insurance in Florida, for 2, $18k for a crappy plan.

For the rich, that's nothing.

Agents are not stupid and are looking at all kind of ways to save taxes.

I think the teams are paying for the players portion health insurance and the player pick up the family portion.

 

[Nineteen67]

No state tax in FL. Aren't they paying effective like 20-30%

No, 35-37%. 20% range of capital gains.

I think federal is higher in the US than Canada when you have millions in personal income.

 

[notbias]

Tavares tried to say his signing bonus and upfront money were the same thing and got taken to task because he got them every year at the beginning. I am not sure of the details but seriously...if the no-tax states had a real advantage I would hope the league would step in...but they seem to think it's ok.

All I am saying is that this isn't what the Derren Dreger's of the world say when they talk about the huge tax differences...you can mitigate them with good planning but I suppose they would rather get more money...wouldn't you if you could?

Owners, agents, GMs, and players have all said it is a factor in signings, and it is becoming a bigger one... it is an issue and it was brought up but the NHL has said it isn't an issue for them.

The biggest issue is that you can't make it fair, because there are other factors in signing, so just keep it as is.

 

[MajorLeaf]

Funny how this wasn’t an issue for 27 or so years between 1993 to 2020 when the two Florida teams were not doing the best (minus Tampa Bay 2004 cup win) and then all of a sudden Tampa, Vegas and now Florida win recently and taxes are an issue.

Canadian teams have the advantage of a lower currency $1.36 CAD over $1.00 USD players are paid USD for salary. Canadian teams can absolutely use this as an advantage even with taxes.

Players were not flocking to low tax states for years, as you would have seen lots of free agents signing there instead of other markets.

Players sign for teams that have a good organization, winning culture, good schools for their kids, safety, weather, travel from team location to other NHL destinations, etc.

Money is just one factor but Canadian teams do have some advantage when it comes to money being currency exchange rate. Their USD salaries go a lot further here than in US franchises.

 

[ULF_55]

Funny how this wasn’t an issue for 27 or so years between 1993 to 2020 when the two Florida teams were not doing the best (minus Tampa Bay 2004 cup win) and then all of a sudden Tampa, Vegas and now Florida win recently and taxes are an issue.

Canadian teams have the advantage of a lower currency $1.36 CAD over $1.00 USD players are paid USD for salary. Canadian teams can absolutely use this as an advantage even with taxes.

Players were not flocking to low tax states for years, as you would have seen lots of free agents signing there instead of other markets.

Players sign for teams that have a good organization, winning culture, good schools for their kids, safety, weather, travel from team location to other NHL destinations, etc.

Money is just one factor but Canadian teams do have some advantage when it comes to money being currency exchange rate. Their USD salaries go a lot further here than in US franchises.

When was the Cap implemented?

2005-2006 Season.

Cost of living is different in different locations.

The average home value in Sunrise, Florida is around $378,570, according to Zillow. However, the median home value is reported to be $337,541, according to U.S. News Real Estate. Additionally, the median sale price of a home in Sunrise is $410,000, according to Redfin. These figures indicate a recent trend of home price increases in Sunrise.

The average home price in Toronto, Ontario is currently around $1.14 million. This figure is a general average and can vary significantly depending on factors like property type (detached, semi-detached, townhouse, condo) and neighborhood. For example, detached homes in Toronto are averaging around $1.43 million, while condos are averaging around $683,000.

 

[Nineteen67]

Funny how this wasn’t an issue for 27 or so years between 1993 to 2020 when the two Florida teams were not doing the best (minus Tampa Bay 2004 cup win) and then all of a sudden Tampa, Vegas and now Florida win recently and taxes are an issue.

Canadian teams have the advantage of a lower currency $1.36 CAD over $1.00 USD players are paid USD for salary. Canadian teams can absolutely use this as an advantage even with taxes.

Players were not flocking to low tax states for years, as you would have seen lots of free agents signing there instead of other markets.

Players sign for teams that have a good organization, winning culture, good schools for their kids, safety, weather, travel from team location to other NHL destinations, etc.

Money is just one factor but Canadian teams do have some advantage when it comes to money being currency exchange rate. Their USD salaries go a lot further here than in US franchises.

This became an issue when a Canadian based team made the finals.

 

[notbias]

Funny how this wasn’t an issue for 27 or so years between 1993 to 2020 when the two Florida teams were not doing the best (minus Tampa Bay 2004 cup win) and then all of a sudden Tampa, Vegas and now Florida win recently and taxes are an issue.

Canadian teams have the advantage of a lower currency $1.36 CAD over $1.00 USD players are paid USD for salary. Canadian teams can absolutely use this as an advantage even with taxes.

Players were not flocking to low tax states for years, as you would have seen lots of free agents signing there instead of other markets.

Players sign for teams that have a good organization, winning culture, good schools for their kids, safety, weather, travel from team location to other NHL destinations, etc.

Money is just one factor but Canadian teams do have some advantage when it comes to money being currency exchange rate. Their USD salaries go a lot further here than in US franchises.

Does currency matter if it is more expensive to live in Toronto than Carolina (not sure if this is true) for example?

The conversion rate is irrelevant, it is just COL, it is not the same price to live in Toronto and Winnipeg for example.

 

[ULF_55]

Does currency matter if it is more expensive to live in Toronto than Carolina (not sure if this is true) for example?

The conversion rate is irrelevant, it is just COL, it is not the same price to live in Toronto and Winnipeg for example.

USD to Canadian helps offset COL.

The median home price in Raleigh, NC is currently around $458,464, according to Rocket Homes. This is up from $445,000 last month. Redfin reports a median sale price of $445K for the month of May 2025, up 0.7% compared to last year. Bankrate indicates a median home price of $400,000 in January 2025, which is 8.1% higher than the state median.

The average house price in Winnipeg, Manitoba, is around $409,356. This is based on data from the Winnipeg Housing Market Report, May 21st, 2025, according to WOWA.ca. The average home price benchmark is $385,300. Single-detached homes have a median sale price of $421,311, townhouses have a median sale price of $313,750, and apartment units have a median sale price of $229,000.

The average house price in Calgary, Alberta, is approximately $693,983, based on recent listings. The median sale price for single detached homes is $704,500, while townhouse and row units have a median sale price of $455,000, according to CREA statistics.

 

[notbias]

USD to Canadian helps offset COL.

The median home price in Raleigh, NC is currently around $458,464, according to Rocket Homes. This is up from $445,000 last month. Redfin reports a median sale price of $445K for the month of May 2025, up 0.7% compared to last year. Bankrate indicates a median home price of $400,000 in January 2025, which is 8.1% higher than the state median.

The average house price in Winnipeg, Manitoba, is around $409,356. This is based on data from the Winnipeg Housing Market Report, May 21st, 2025, according to WOWA.ca. The average home price benchmark is $385,300. Single-detached homes have a median sale price of $421,311, townhouses have a median sale price of $313,750, and apartment units have a median sale price of $229,000.

The average house price in Calgary, Alberta, is approximately $693,983, based on recent listings. The median sale price for single detached homes is $704,500, while townhouse and row units have a median sale price of $455,000, according to CREA statistics.

Okay, and now do Toronto for example...

COL is city dependent, not country dependent, so conversion is irrelevant.

Also, taxes are far more important than house purchases which is the only thing that'll move the needle for these players.

Houses are likely a once while you play kind of thing, and retain value for the most part, taxes are yearly.

 

[Nineteen67]

USD to Canadian helps offset COL.

The median home price in Raleigh, NC is currently around $458,464, according to Rocket Homes. This is up from $445,000 last month. Redfin reports a median sale price of $445K for the month of May 2025, up 0.7% compared to last year. Bankrate indicates a median home price of $400,000 in January 2025, which is 8.1% higher than the state median.

The average house price in Winnipeg, Manitoba, is around $409,356. This is based on data from the Winnipeg Housing Market Report, May 21st, 2025, according to WOWA.ca. The average home price benchmark is $385,300. Single-detached homes have a median sale price of $421,311, townhouses have a median sale price of $313,750, and apartment units have a median sale price of $229,000.

The average house price in Calgary, Alberta, is approximately $693,983, based on recent listings. The median sale price for single detached homes is $704,500, while townhouse and row units have a median sale price of $455,000, according to CREA statistics.

The median price is irrelevant because they live in expensive areas. In Huntsville the median house is ~350k and where we live most barns, shops and pool houses are worth more than that.
Mortgage rates and terms used to be much better in the US. We were lucky as heck to buy in perfect time and had 15 yr fixed mortgage @ 2.2% with only 10% down. We literally made money over the 15 yrs

 

[ULF_55]

Okay, and now do Toronto for example...

COL is city dependent, not country dependent, so conversion is irrelevant.

Also, taxes are far more important than house purchases which is the only thing that'll move the needle for these players.

Houses are likely a once while you play kind of thing, and retain value for the most part, taxes are yearly.

Already did above.

 

[ULF_55]

The median price is irrelevant because they live in expensive areas. In Huntsville the median house is ~350k and where we live most barns, shops and pool houses are worth more than that.
Mortgage rates and terms used to be much better in the US. We were lucky as heck to buy in perfect time and had 15 yr fixed mortgage @ 2.2% with only 10% down. We literally made money over the 15 yrs

Oh definitely, location location location ...

30-40 minutes from Calgary arena

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[Dreakmur]

This is why it’s impossible to adjust the cap based on tax rates. Simple solution is a league mandated luxury tax. Then everyone can complain when TTOE, NYR, BOS, PHILLY, CHI, VGK, et al., are always in the finals.

It’s not impossible… it’s just unpalatable.

Create a central escrow account that all players pay into every year and have that account be paid out to equalize take home pay.

 

[seventieslord]

​

Quick Comparison Example (Hypothetical)​

Scenario	Regular Salary	Upfront Bonus
Gross Income	$10M over 1 year	$10M on Day 1
Tax Rate	50%	15% (via treaty)
Net After Tax	$5M (earned over time)	$8.5M on Day 1
1-Year Return @ 5%	$0 (can’t invest until earned)	$425,000
Total After 1 Year	$5M	$8.925M

This can't be right. Why on earth would a signing bonus be taxed so much less that regular salary?

 

[seventieslord]

It’s not impossible… it’s just unpalatable.

Create a central escrow account that all players pay into every year and have that account be paid out to equalize take home pay.

I've tossed this around in my head for a while now and I think the thing that made the most sense overall was a version of this.

But yeah, unpalatable is an understatement...

 

[colchar]

Because the Canadian govt is not fiscally responsible. Unlimited natural resource wealth on crown lands and we can't even balance the books. We should be like the UAE and instead we aren't even equal to like England which is a hot mess.

it's a joke

Um, it is the United Kingdom not England.

 

[WillNy29]

This can't be right. Why on earth would a signing bonus be taxed so much less that regular salary?

due to tax treaty for jocks and celebrities