- According to one estimate, LeBron James took home about half of his $US33 million contract after taxes and other costs, giving a sense of how athletes are taxed compared with most people.
- James was docked almost $US13 million in taxes, plus another $US4 million in other costs, according to the estimate.
- James is estimated to make about $US55 million off the court in endorsements and has the chance to become the highest-paid player in NBA history this offseason.
By now we know that most athletes’ contracts aren’t what they seem.
Though the numbers in the contracts are enormous, after federal, state, and local taxes, plus fees for agents and other costs, athletes usually ending up taking home close to half of their base salary.
ESPN’s Darren Rovell broke down what LeBron James, the second-highest-paid player in the NBA this season, made from his $US33 million contract. While it’s still quite a big number, based on Rovell’s estimate, it’s less than half of that figure.
According to Rovell, James was docked $US11.9 million in federal taxes, $US2.1 million in state and city taxes, $US950,000 in agent fees (agents usually collect 2-3% of player contracts), and another $US18,000 in his 401(k) based on 2017 estimates.
James also lost an estimated $US3.3 million to the NBA escrow, a 10% fee players pay to balance the basketball-related income split between themselves and the owners. James received some money back from the year before because revenues exceeded the forecast. (Read more on the escrow here).
James did, however, make some money back from last year’s NBA escrow and a bit more in a shortfall.
In total, Rovell estimated that James made about $US16.7 million this year.
The Cavs paid LeBron $33.2 million this season. We estimated how much he actually took home. Here’s our math. pic.twitter.com/Q18ZwI50Jx
— Darren Rovell (@darrenrovell) June 4, 2018
Luckily for James, he’s an even bigger earner off the court – it’s been estimated he makes $US55 million in endorsements.
James’ situation is not unlike that of Stephen Curry, who also took home about half of his NBA-record $US35 million salary.
Other professional athletes have said their salary numbers should be cut in half right from the get-go because of taxes. Los Angeles Rams defensive end Ndamukong Suh told Business Insider he didn’t think the average person understood what athletes make and how many expenses they have.
This summer, James can become a free agent and has the chance to become the highest-paid player in the NBA.
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