The contract amount is pre-taxed.

Therefore what a player has to pay varies by where they live.

For instance, Matthews only gets $750K a year in Toronto at 53.53% taxation and gets the rest as a signing bonus on July 1st while living in Arizona at 39.5% taxation.

Canadian teams pay American players like that a lot. Unfortunately Canadian players don’t have that escape, unless you’re Messier in Vancouver who lived in Washington at the time.

Hence why guys like Marner receive so damn much, because after taxes his take home is a little more than $5 million whereas Tkachuk’s take home in Florida is roughly $5.6 million since he only has a 37% tax rate there.

It’s utter BS and I honestly can’t believe it took me this long to stumble across it. 18 years of cap era, canadian teams only made the finals 3x, twice were the first two years while teams were adjusting, and once while Price stood on his head. Closest team cap wise would be in NY where they’d still have $4.5 million more to offer as a take home… meaning they basically have a $10 million advantage since players don’t have to sign for as much to get what they want to take home.
- Dozzer

Matthews doesn’t pay 53% income tax. He almost certainly has a Retirement Compensation Arrangement which is kind of like an individualized pension. It allows the player to put a big chunk of their salary aside and pay no tax on it until they retire when they are taxed at a much lower rate. While playing, they are taxed on the amount of money they keep and don’t put into the fund. When retired, the amount of money they draw from the fund each year determines how much tax they pay each year. The player agent, Allan Walsh suggested that players pay about a 20% tax rate.

Matthews doesn’t pay 53% income tax. He almost certainly has a Retirement Compensation Arrangement which is kind of like an individualized pension. It allows the player to put a big chunk of their salary aside and pay no tax on it until they retire when they are taxed at a much lower rate. While playing, they are taxed on the amount of money they keep and don’t put into the fund. When retired, the amount of money they draw from the fund each year determines how much tax they pay each year. The player agent, Allan Walsh suggested that players pay about a 20% tax rate.
- Canada Cup

Yeah I have to agree.

From my experience in finance, people with that kind of money have so many options available to pay next to nothing in tax. Wouldn't be shocked if players have corporations and pay themselves a salary. I don't even know if that's legal for them.

I find this kinda funny. Isn't Dubas the one who gave him his now great value contract? Like why does he get poop on for it being a bad contract and at the same poop on for when it's a good value contract?
- Aaron_85

He could have had willie for less. It took 3 years and other gms overpaying their players to make it a great value contract

You're right, but Canadian players to have the option of using retirement tax shelters and deferrals which significantly reduce the taxation amount paid, but it's money that you don't get until you're 55. So Marner's contract is incredibly signing bonus heavy. I wouldn't be surprised to find that he takes a hefty portion of each bonus and allocates it to deferred funds. It doesn't change the that that on the residual he's taxed at 53%.

The take home difference has a lot more to do with money in your pocket now, which is something most people want.
- Monkeypunk

Non Canadians use the same vehicles and they don’t have to wait till they’re 55. They can start to draw it down when they retire which is only 55 for Gio.

Willy for Wilson. One for one.

I honestly don’t think Matthews likes Nylander that much. He’d clearly rather play with Marner. Matthews has to do too much of the heavy lifting on defence when he plays with Nylander.
- Arctic_AARDVARK

This isn't a good trade..wilson isnt the player he once was

(frank)ing jays bullpen sucks today.

Yeah I have to agree.

From my experience in finance, people with that kind of money have so many options available to pay next to nothing in tax. Wouldn't be shocked if players have corporations and pay themselves a salary. I don't even know if that's legal for them.
- Aaron_85

These RCAs are used by high income earners outside sports. Revenue Canada is coming after Jose Bautista (Russel Martin and Donaldson as well) because they say he took too much money out once or something. You have to treat it like a pension and they watch them pretty carefully.

The NBA doesn’t allow players on the Raptors to use them because they say it gives the Raptors too much if an advantage. (Irony alert)

You're right, but Canadian players to have the option of using retirement tax shelters and deferrals which significantly reduce the taxation amount paid, but it's money that you don't get until you're 55. So Marner's contract is incredibly signing bonus heavy. I wouldn't be surprised to find that he takes a hefty portion of each bonus and allocates it to deferred funds. It doesn't change the that that on the residual he's taxed at 53%.

The take home difference has a lot more to do with money in your pocket now, which is something most people want.
- Monkeypunk

Oh I know, but he wants to make more to cover the taxation he’ll get hammered with when he does turn 55.

He’s avoiding it by asking for more which means his take home still lines up with what he wants annually then. I know there’s smaller details only an accountant gets (hence why he’s receiving the extra $66K) but all that waiting does is hold off on paying out the taxation in general. Or is there a post 55 massive difference I’m unaware of?

Matthews doesn’t pay 53% income tax. He almost certainly has a Retirement Compensation Arrangement which is kind of like an individualized pension. It allows the player to put a big chunk of their salary aside and pay no tax on it until they retire when they are taxed at a much lower rate. While playing, they are taxed on the amount of money they keep and don’t put into the fund. When retired, the amount of money they draw from the fund each year determines how much tax they pay each year. The player agent, Allan Walsh suggested that players pay about a 20% tax rate.
- Canada Cup

Did you read what I said?

He pays the 53.53% rate on $750K a year and receives the rest as a bonus down in Arizona on July 1st at 39.5% (37% national and 2.5% state)

Matthews doesn’t pay 53% income tax. He almost certainly has a Retirement Compensation Arrangement which is kind of like an individualized pension. It allows the player to put a big chunk of their salary aside and pay no tax on it until they retire when they are taxed at a much lower rate. While playing, they are taxed on the amount of money they keep and don’t put into the fund. When retired, the amount of money they draw from the fund each year determines how much tax they pay each year. The player agent, Allan Walsh suggested that players pay about a 20% tax rate.
- Canada Cup

Matthews would either use an RCA or deferral in the US as well, or for the monies he wants NOW, he would pay the local Arizona rate of about 37% - unless he was using other tax shelter options (which I'm sure he does). The bottom line there is that everyone can use these options, so having a lower initial tax rate still affects notable portions of the large non-deferred monies received.

For his $700k salary, his initial taxation is based on 73% of the 53% - because he lives in Ontario 73% of the year; the remaining 37% of that revenue is taxed at 37% in Arizona. Salary isn't something you put into the RCA - it's more for the one-time large salary transfers, so that salary is probably like his "petty cash". He'd be taking home about $357k USD in salary. If he was strictly an Ontario resident, that same amount would be $325,500 - so it's a $30k difference which isn't drastic when you're into those figures.

Pretty sure they can't offer any contracts to UFAs until July 1st....
- oldstyle

this is incorrect. they can sign their own ufa but not other teams ufa's

Matthews would either use an RCA or deferral in the US as well, or for the monies he wants NOW, he would pay the local Arizona rate of about 37% - unless he was using other tax shelter options (which I'm sure he does). The bottom line there is that everyone can use these options, so having a lower initial tax rate still affects notable portions of the large non-deferred monies received.

For his $700k salary, his initial taxation is based on 73% of the 53% - because he lives in Ontario 73% of the year; the remaining 37% of that revenue is taxed at 37% in Arizona. Salary isn't something you put into the RCA - it's more for the one-time large salary transfers, so that salary is probably like his "petty cash". He'd be taking home about $357k USD in salary. If he was strictly an Ontario resident, that same amount would be $325,500 - so it's a $30k difference which isn't drastic when you're into those figures.
- Monkeypunk

How does he write it off as salary when he receives millions all on one date? For instance his “salary” this year is $775K with a $7.2 million “bonus” received July 1.

Sincere question. If he already has a minimal salary listed how is he hiding the bonus as one?

Willy’s going to demand 10 million.

Trade him while his value is at its highest, or let him walk for nothing.

Either way the Leafs aren’t winning with players like him.
- Arctic_AARDVARK

and sign for 8.5M over 6yrs

Games gonna be a cluster (frank) tonight.

and sign for 8.5M over 6yrs
- dmnted

This or 10.2 for 5

Hoping for the 6

Willy’s going to demand 10 million.

Trade him while his value is at its highest, or let him walk for nothing.

Either way the Leafs aren’t winning with players like him.
- Arctic_AARDVARK

Maybe if the Leafs other forwards would actually play better than him in the playoffs, we'd go deeper. Only guy playing better than him is Matthews.

Maybe if the Leafs other forwards would actually play better than him in the playoffs, we'd go deeper. Only guy playing better than him is Matthews.
- GreatGigInTheSky

Marner.

14 pts, +7, kills penalties…

The Marner hate is insane.

Marner.

14 pts, +7, kills penalties…

The Marner hate is insane.
- Arctic_AARDVARK

Wish they’d just line him up with some talented gritty power forwards.

Look the (frank) out if they did.

and sign for 8.5M over 6yrs
- dmnted

That seems like the likely numbers Nylander comes in at.

Matthews doesn’t pay 53% income tax. He almost certainly has a Retirement Compensation Arrangement which is kind of like an individualized pension. It allows the player to put a big chunk of their salary aside and pay no tax on it until they retire when they are taxed at a much lower rate. While playing, they are taxed on the amount of money they keep and don’t put into the fund. When retired, the amount of money they draw from the fund each year determines how much tax they pay each year. The player agent, Allan Walsh suggested that players pay about a 20% tax rate.
- Canada Cup

I was going to open this can of worms, but I know that I’m not an expert on this topic, and honestly I find it draining even thinking about it.

Whether or not players pay more taxes in Canada/ON/NY/FLA/AB or wherever, I don’t think it’s as big of a factor as some make it out to be. Willy shouldn’t be getting anywhere near as much of the slice of the cake as Tkachuk gets. No one should be making 10 mil except maybe McDavid.

Hazy-B got into it with MJ yesterday about a similar topic. Why is it that the stars in Toronto ALWAYS have to demand top dollar? Why can MacKinnon go out and take a 12.6 x 8 deal but Matthews will demand 14? Why should we accept that? Is Matthews worth 4.5 Mil a year more than Tkachuk? No (frank)ing way!

Marner.

14 pts, +7, kills penalties…

The Marner hate is insane.
- Arctic_AARDVARK

So, you didn't actually watch the games, eh? Because Marner was terrible a lot of the playoffs.

And as I've told you many times now; I like Marner a lot. I got his sweater. I also badly want him to actually play better than he does in the playoffs.

So, you didn't actually watch the games, eh? Because Marner was terrible a lot of the playoffs.

And as I've told you many times now; I like Marner a lot. I got his sweater. I also badly want him to actually play better than he does in the playoffs.
- GreatGigInTheSky

Marner is the sacrificial lamb every year.

Without him it’s a debate if they even make the playoffs.

That seems like the likely numbers Nylander comes in at.
- GreatGigInTheSky

I hope so but I also doubt it.

Remember that he’s technically making $7.5 million a year atm but only gets the $6.96 million due to the time he missed. Contract was technically 6 years for $45 million.

I was going to open this can of worms, but I know that I’m not an expert on this topic, and honestly I find it draining even thinking about it.

Whether or not players pay more taxes in Canada/ON/NY/FLA/AB or wherever, I don’t think it’s as big of a factor as some make it out to be. Willy shouldn’t be getting anywhere near as much of the slice of the cake as Tkachuk gets. No one should be making 10 mil except maybe McDavid.

Hazy-B got into it with MJ yesterday about a similar topic. Why is it that the stars in Toronto ALWAYS have to demand top dollar? Why can MacKinnon go out and take a 12.6 x 8 deal but Matthews will demand 14? Why should we accept that? Is Matthews worth 4.5 Mil a year more than Tkachuk? No (frank)ing way!
- Arctic_AARDVARK

It’s because they sign for what they WILL be worth in 3-4 years. It’s what a long term contract has to do. Cheaper deals are the shorter ones.

Thinking the same thing tbh.

Was thinking the core might be a little broken up but now it feels like they’ll run with the same core but with a different approach.
- Dozzer

I suspect they may run with Keefe at first too.