You're a free agent. Two teams are offering the same $20 million per year. One in Texas. One in California.
If you only look at the headline number, you're leaving money on the table — potentially over a million dollars per year. Here's how to compare offers the right way.
When an agent calls and says "Team X is offering $20M per year," your first question should be: "What's my after-tax take-home?"
The same gross salary produces wildly different net income depending on:
• State income tax rate (0% in Texas and Florida, 13.3% in California)
• Local jock tax obligations (a team with more away games in high-tax states costs more)
• Escrow rules (NBA withholds 10%)
• Agent commission (varies by league, 3-5%)
Let's run the numbers on a hypothetical $20 million offer from the Miami Heat and the Los Angeles Lakers:
Miami Heat (Florida, 0% state tax):
• Federal tax: ~$7.2M
• State tax: $0
• FICA: ~$470K
• Agent (4%): $800K
• NBA Escrow (10%): $2M
• Jock Tax (est.): ~$400K
• Estimated take-home: ~$9.1M
Los Angeles Lakers (California, 13.3% state tax):
• Federal tax: ~$7.2M
• State tax: ~$2.66M
• FICA: ~$470K
• Agent (4%): $800K
• NBA Escrow (10%): $2M
• Jock Tax (est.): ~$400K
• Estimated take-home: ~$6.5M
That's a $2.6 million difference per year on the same headline contract.
Cost of living: $6.5M in Los Angeles buys a different lifestyle than $6.5M in Miami. Housing, daily expenses, and even "keeping up with teammates" costs vary dramatically by market.
Endorsement potential: Big-market teams often come with bigger endorsement opportunities. That extra $2.6M in taxes might be offset by a higher national profile. But it's not guaranteed — and taxes are.
Contract structure: Signing bonuses, option years, and incentive clauses all affect your tax situation. A signing bonus paid upfront is taxed in the year received — which could push you into a higher bracket.
Before you sign, do this:
1. Compare the after-tax take-home pay for each offer using the calculator.
2. Factor in cost of living differences.
3. Ask your agent to project endorsement income for each market.
4. Understand the escrow and jock tax implications.
5. Consult a CPA who specializes in athlete taxes.
Related reading: No State Tax Teams vs. High Tax States · Agent Commission Across Leagues
Compare your free agent offers side-by-side and see the real difference:
Use the Free Calculator →Disclaimer: This article is for informational purposes only. It does not constitute financial, tax, or legal advice. Always consult a qualified professional.
← Back to Articles