How much does an NHL player take home on a $1 million salary? Not as much you think

SloMotion · 02-23-2016, 09:29 AM

Originally Posted by SmashMouth

Not bad, but no as good as one might think. It's incredible to think you can gross a cool million but get to keep merely 25% of that. Sounds like a Bernie Sanders-esque tax plan...

If it was before expenses, yeah, I'd agree, but that $240k is after taxes and a budget that is way over the top for someone like me ... ie $3k a month basic living expenses, $3k a month misc., $24k annual car expenses, $50k annual housing expense ... what average joe budgets that kind of bank? They're doing alright, IMO,

.

The first thing a player faces is escrow. The collective bargaining agreement stipulates 50 per cent of hockey revenue must go to player salaries and players are required to provide a certain percentage of their salary to the league to cover potential shortfalls.

Currently that is 18 per cent. Escrow is calculated after taxes and players have always received some of that money back. At that rate a player would pay the NHL $180,000 and keep their fingers crossed the league is profitable so they get all or some of it back.

Next comes income tax. Having paid escrow, the player is now taxed at a rate of around 50 per cent on $820,000, depending on where the player lives in Canada. A player in Montreal, Toronto or Ottawa pays the government $410,000.

Players pay their agents between three and six per cent depending on the amount of services provided by the agent. The agent’s fee is calculated after escrow is paid. If a player pays his agent four per cent of $850,000 (after escrow) it would be $34,000.

Simon, who tries to educate young players on the importance of setting and sticking to a budget, estimates players will spend around $70,000 a year for hockey-related expenses – things such as agent fees, personal trainer, disability insurance, trainer tips, supplements, workout equipment, etc.

So there goes another substantial chunk of the $1 million.

Simon estimates players need to budget $50,000 for rent and utilities assuming one can get a 10-month lease. A young player who takes on a roommate to split costs, it could be less than $50,000. If you are an older guy renting a house in New York or California it will be closer to $100,000.

“I know guys who are renting in Chicago or New York for $15,000 a month,” Simon said. “And you probably can’t get a 10-month lease there; you almost always have to do 12 months.”

For basic living expenses (food, clothing etc.) Simon budgets $3,000 a month and he budgets another $3,000 a month for miscellaneous expenses (entertainment, gifts etc.). That works out to a combined $72,000. He also budgets $25,000 a year for car expenses which includes monthly payments and insurance.

At the end of the day the player is left with a net savings of around $240,000.

02-23-2016, 09:29 AM	#4
SloMotion 5000 POSTS! + Join Date: Jan 2012 Posts: 6,776 Blog Entries: 15	Re: How much does an NHL player take home on a $1 million salary? Not as much you think Originally Posted by SmashMouth Not bad, but no as good as one might think. It's incredible to think you can gross a cool million but get to keep merely 25% of that. Sounds like a Bernie Sanders-esque tax plan... If it was before expenses, yeah, I'd agree, but that $240k is after taxes and a budget that is way over the top for someone like me ... ie $3k a month basic living expenses, $3k a month misc., $24k annual car expenses, $50k annual housing expense ... what average joe budgets that kind of bank? They're doing alright, IMO, . The first thing a player faces is escrow. The collective bargaining agreement stipulates 50 per cent of hockey revenue must go to player salaries and players are required to provide a certain percentage of their salary to the league to cover potential shortfalls. Currently that is 18 per cent. Escrow is calculated after taxes and players have always received some of that money back. At that rate a player would pay the NHL $180,000 and keep their fingers crossed the league is profitable so they get all or some of it back. Next comes income tax. Having paid escrow, the player is now taxed at a rate of around 50 per cent on $820,000, depending on where the player lives in Canada. A player in Montreal, Toronto or Ottawa pays the government $410,000. Players pay their agents between three and six per cent depending on the amount of services provided by the agent. The agent’s fee is calculated after escrow is paid. If a player pays his agent four per cent of $850,000 (after escrow) it would be $34,000. Simon, who tries to educate young players on the importance of setting and sticking to a budget, estimates players will spend around $70,000 a year for hockey-related expenses – things such as agent fees, personal trainer, disability insurance, trainer tips, supplements, workout equipment, etc. So there goes another substantial chunk of the $1 million. Simon estimates players need to budget $50,000 for rent and utilities assuming one can get a 10-month lease. A young player who takes on a roommate to split costs, it could be less than $50,000. If you are an older guy renting a house in New York or California it will be closer to $100,000. “I know guys who are renting in Chicago or New York for $15,000 a month,” Simon said. “And you probably can’t get a 10-month lease there; you almost always have to do 12 months.” For basic living expenses (food, clothing etc.) Simon budgets $3,000 a month and he budgets another $3,000 a month for miscellaneous expenses (entertainment, gifts etc.). That works out to a combined $72,000. He also budgets $25,000 a year for car expenses which includes monthly payments and insurance. At the end of the day the player is left with a net savings of around $240,000.