To the winner of the Super Bowl LI go all the spoils: the bragging rights, the huge ring, the bonus...and yes, the taxes.
This year, each player on the winning team—from the quarterback down to the third-string rookie—got the same $107,000 bonus. They also got a ring worth an estimated $30,000. The catch? Both are taxable based on the player’s income bracket. And most of those players are in the highest bracket, currently at 39.6% That means the big game winners could owe a whopping $54,252 each in federal taxes. According to the U.S. Census Bureau, the median American household earns about $52,000.
But that's not all. Players also owe state taxes, which vary. And then there’s the “jock tax," a state income tax levied on out-of-state athletes for each day they worked there. The Pats and Falcons lucked out this year because the Super Bowl was held in Texas, where there’s no state income tax, and therefore no jock tax. Compare that to last year, when the Super Bowl was played in California, a state that imposes a 13.3% tax on the highest incomes. That’s a savings of $18,221.
Before you shed a tear for them, remember that NFL salaries start at $450,000 a year. And a big day at the Super Bowl has the potential to boost a football player's earnings for life:
Going into last year’s Super Bowl, for example, Denver Broncos linebacker Von Miller already had endorsement deals with Adidas and Beats by Dre. But a week after being named Super Bowl MVP, Adidas doubled down and announced Miller would be the face of its FREAK franchise. Later in 2016, Miller starred in EA Sports’ commercial for the Madden NFL 17 video game, and he also became the face of Old Spice. He hit the talk show circuit and performed briefly on Dancing with the Stars. And of course, he came out of a long contract negotiation with the Broncos with a record setting six-year $114.5 million deal.
We think they'll be fine.