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The players will enter the field Super Bowl LX on Sunday will face a significant tax liability due to the location of the game which creates what is known as the “jockey tax.”
Super Bowl LX will be played in Santa Clara, California, and the Golden State is one of the states that have used the so-called. jockey tax for professional athletes, which assesses taxes on players based on the number of days they spend playing or training in a certain area – including those away from their home country.
The NFL’s collective bargaining agreement sets the bonuses paid to players on both the winning and losing sides of the Super Bowl – players on the winning team each receive a payday of $178,000 and players on the losing team will receive $103,000.
Jeffrey Degner, an economist at the American Institute for Economic Research, told FOX Business that while those bonuses are “nothing to sneeze at,” the amount players will take home after taxes like the jock tax and other federal and state taxes is much smaller.
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Super Bowl LX will air on Feb. 8 at Levi’s Stadium in California. (Photos by Kirby Lee-Imagn via Reuters)
“What that means here is that the winning team, their take home pay will be about $86,000. If you’re on the losing side, the take home money would be $49,800,” said Degner.
Jock taxes apply NFL players throughout the season in the areas where they work, so whenever they play or practice in an area where the jock tax has been applied, they will be taxed on the income received that day.
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Super Bowl LX will be held at Levi’s Stadium in Santa Clara, California, which triggers the state’s jock tax. (Ishika Samant/Getty Images)
Both states and cities can implement a jock tax, adding layers of complexity to a jock’s tax burden, though it remains more popular at the state level than at the municipal level.
Most jockey taxes are applied using the “business day” standard, as some agencies have faced court challenges and potential issues.
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Super Bowl winners take home bigger bonuses than players on the losing team, who still get a significant paycheck. (Timothy A. Clary/AFP via Getty Images)
I work day The format uses the number of days an athlete spends “on duty” playing a game, practicing, participating in team meetings, travel days and – in the case of the Super Bowl – fulfilling team-related media obligations.
Total earnings are multiplied by the number of days of work spent in a particular area other than the number of days of work for the athlete to determine jock tax liability.
“Work days include days when you practice or, in the case of the Super Bowl, even a media day counts as a work day and if that work takes place in California, it’s subject to those tax laws,” Degner said.
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“Players have a difficult tax situation when they can’t have ten or more different states that they have to pay taxes to,” he said. “That’s why most of the small players, it’s important that the teams settle them with sharp financial advisors and tax advisors so they don’t lose their shirts.”
