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NHL Player Salaries and Deductions

This seems to be a rather difficult topic to research, so I'm looking for some help.

The average NHL salary in 2011 was $2.4M, so I've used $3.0M in my calculations.

The numbers are slightly different for each player, depending on where they live and play, so here are my calculations. My assumptions will follow.

US CDN US CDN
Reported Annual Salary $3,000,000 $2,912,621
Escrow $600,000 $582,524 20.0% 20.0%
Federal Tax $950,400 $675,728 39.6% 29.0%
State/Provincial Tax $144,000 $294,058 6.0% 12.6% *Quebec is 25.75%
Union Dues $30,000 $29,126 1.0% 1.0%
Agent Commission $150,000 $145,631 5.0% 5.0%
Total Deductions $1,874,400 $1,727,068
Net Pay $1,125,600 $1,185,553
% of Reported Salary
37.5% 40.7%

Assumptions:

  • US/CDN exchange rate is $0.97 and all players are paid in $US
  • Federal tax rates for US and Canada are assumed to be the highest rates and I haven't broken down the income for each rate at each tier below the maximum, so the actual number is a little high
  • State/Provincial tax is an average based on states/provinces that have NHL franchises. States like Florida and Texas have no state tax. Alberta has 10% flat tax. Quebec was excluded because it severely skewed the average.
  • Union dues are a total guess since I couldn't find a source
  • Agent commission is an average based on a range of 3-8%
  • Escrow amount is not included in the tax calculations because it isn't taxed until paid. Escrow is paid if HRR is positive (i.e. the league makes money), but the amount is not guaranteed

Two additional notes

  1. Agent's fees are a deductible expense in the US, but not in Canada (not included in calculations)
  2. Looks like the personal income tax rate in Quebec (25.75%) is reason enough to not put another team there

Did I miss anything? Please correct any errors.

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