On June 23 and 24, at Brooklyn's Barclays Center, 60 young men will hear their names called and become instant millionaires.[reference:0][reference:1] But before they start picking out cars and houses, they need to understand one thing: that $13.8 million first-year salary doesn't mean $13.8 million hits your bank account.
This draft class — headlined by BYU wing AJ Dybantsa, Kansas guard Darryn Peterson, and Duke forward Cameron Boozer — is being called one of the deepest in modern NBA history.[reference:2][reference:3] Every lottery pick will sign an eight-figure contract. But after federal tax, state tax, jock tax, agent fees, and escrow, what's actually left? Let's run the numbers.
NBA rookie contracts are predetermined by the Collective Bargaining Agreement and tied to the salary cap, which sits at $154.647 million for 2025-26.[reference:4] First-round picks can sign for 80% to 120% of the rookie scale amount — most top picks sign for the full 120%.
The No.1 overall pick in 2026 is projected to earn approximately $13.8 million in Year 1 alone.[reference:5] But from that starting point, a gauntlet of deductions begins.
| Pick | Year 1 Salary (120%) | Year 2 | Year 3 (Team Option) |
|---|---|---|---|
| 1st | $13,825,920 | $14,517,480 | $15,208,680 |
| 5th | $9,069,840 | $9,523,080 | $9,976,560 |
| 10th | $6,016,080 | $6,316,680 | $6,617,160 |
| 20th | $3,658,800 | $3,841,680 | $4,024,440 |
| 30th | $2,514,720 | $2,640,360 | $2,766,120 |
These numbers are guaranteed for the first two years, with team options in years three and four. But those are gross figures — what follows is where the headlines end and real life begins.
Let's use AJ Dybantsa — the projected No.1 pick to the Washington Wizards — as an example.[reference:6][reference:7]
Step 1: Federal Income Tax (37% top rate). On $13,825,920, that's roughly $5,115,590. This is the single largest deduction and applies equally regardless of which team you play for.
Step 2: State Income Tax. D.C. has a tax rate of approximately 9.9%. That's another ~$1,368,766. If Dybantsa were drafted by the Heat instead of the Wizards, this number would be $0 — Florida has no state income tax. That's a $1.37 million difference just from draft destination.
Step 3: NBA Escrow (10%). The league withholds 10% of every player's salary to ensure the players' share of Basketball Related Income stays at 51%.[reference:8] For Dybantsa, that's $1,382,592. Some of it may come back after the season — but players received only about 9% of their escrow back in 2024-25. Most of it is gone permanently.
Step 4: Agent Commission (4% max). NBA players can pay up to 4% to their agents. On this contract, that's $553,037.
Step 5: Jock Tax (away games, est. 2%). Every road game in a taxing state triggers a non-resident tax filing. A conservative estimate: $276,518.
Step 6: FICA (Social Security & Medicare, 2.35%). Roughly $324,909.
| Deduction | Amount (Approx.) |
|---|---|
| Gross Year 1 Salary | $13,825,920 |
| Federal Tax (37%) | -$5,115,590 |
| State Tax (D.C., 9.9%) | -$1,368,766 |
| NBA Escrow (10%) | -$1,382,592 |
| Agent Commission (4%) | -$553,037 |
| Jock Tax (est. 2%) | -$276,518 |
| FICA (2.35%) | -$324,909 |
| Estimated Take-Home | ~$4,804,508 |
Bottom line: AJ Dybantsa's $13.8 million rookie salary translates to roughly $4.8 million in actual take-home pay — about 35% of the headline number. That's still life-changing money, but it's not the $13.8 million that will be reported in every headline on draft night.
One of the most overlooked aspects of the draft is geography. The difference between being drafted by a team in a no-tax state versus a high-tax state can be over $1 million per year — purely due to state income tax.
The teams with no state income tax: Miami Heat, Orlando Magic (Florida), Dallas Mavericks, Houston Rockets, San Antonio Spurs (Texas), Memphis Grizzlies (Tennessee).
The most expensive destinations for rookies: Golden State Warriors, Los Angeles Lakers, LA Clippers, Sacramento Kings (California, 13.3%), and New York Knicks, Brooklyn Nets (New York, 10.9%).
The projected top four picks — Dybantsa to Washington, Peterson to Utah, Boozer to Memphis, and Wilson to Chicago — face dramatically different tax situations. Boozer, in Memphis, would pay zero state income tax, saving roughly $1.37 million compared to Dybantsa in D.C. That's the kind of detail that should matter as much as the franchise's depth chart.[reference:9]
If the numbers above seem abstract, listen to what happened to Ivica Zubac. As a Lakers rookie in California, he requested a $250,000 advance on his contract. When he checked his bank account, only $105,000 had been deposited.[reference:10]
The rest? Federal tax. California's 13.3% state tax. Jock taxes. Health care. Pension. "I thought I was rich overnight," Zubac said. "Then you see how it really works. Half of what you see is gone, especially in California."[reference:11]
After moving to the Indiana Pacers, Zubac's tax burden dropped significantly, and his take-home percentage rose to nearly 50-60%.[reference:12] The lesson: where you sign matters enormously.
Everything described above applies to first-round picks with guaranteed contracts. Second-round picks and undrafted players face an entirely different reality — they often sign non-guaranteed two-way deals or minimum contracts.[reference:13]
While the league minimum for a rookie in 2025-26 exceeds $1.1 million, these contracts come with zero long-term security. A player drafted in the second round could be cut in training camp and owe taxes on income he never got to keep. This is why draft position doesn't just determine salary — it determines security.
1. Run the real numbers. Don't plan your life around the gross salary — plan it around what actually hits your account after all deductions.
2. Understand your draft destination's tax burden. A 13.3% state tax rate vs. 0% is a seven-figure decision.
3. Don't spend before the money lands. Zubac's $250,000 became $105,000 overnight. Every rookie has a similar story.
4. Hire a CPA who knows athlete taxes — not your cousin.
Further reading: "I Just Got Drafted. Now What?" — A Financial Survival Guide for Rookies · No State Tax Teams vs. High Tax States · Agent Commission Across Leagues
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