James’ annual salary is close to half a billion, how much can he really get?

James’ annual salary is US$47.6 million. How much can he really get? You may not believe it!

In recent years, as the salary cap has continued to increase, players’ salaries have also increased. Contracts worth tens of millions are everywhere, and superstars like James, Curry, and Antetokounmpo can easily earn them. Signed a maximum salary contract of more than 200 million U.S. dollars, and the annual salary is almost 40 to 50 million U.S. dollars. However, this seemingly attractive salary is actually greatly reduced in the hands of the players. Why is this? Let’s take James as an example and take a look.

As the number one player in the league in this era, James is also unique in his ability to attract money. You must know that he has been the highest-paid player in the NBA for ten consecutive years, and his total career salary has exceeded US$500 million, ranking first in history. . Despite this, the salary James earns every year on the court has shrunk significantly after receiving it. For example, his annual salary this season was US$47.6 million, but in the end it was actually less than US$20 million.

Why does James actually receive less than half of his $47.6 million annual salary? In fact, this is related to the high tax ratio in the United States. Federal tax alone accounts for 37% of the annual salary, which will directly deduct $17.612 million from James. At the same time, the Lakers are located in California, and the state tax is 13.3%, which deducts another $6.33 million. The above two expenses alone, totaling US$23.94 million, already account for half of James’ annual salary.

Not only that, James also has to pay 10% of the league’s third-party escrow fee every year, which is the NBA’s “medical and social security”. The total is 4.76 million US dollars, but this money will be returned in the form of a pension year after James retires. After deducting the above fees, James finally had to pay an agent fee of 4%, which is US$1.9 million.

To sum up, federal tax + state tax + alliance custody fee + agent remuneration, these four fees add up to more than 30 million U.S. dollars, which means that James’s annual salary of 47.6 million is actually only about 17 million U.S. dollars. And what you need to know is that because the U.S. government has strict tax investigation policies, these NBA players dare not evade taxes. Once caught, not only will you face a huge fine, but you will also face jail time.

It is worth mentioning that the tax rates levied by each state in the United States are also different. If James is still playing for the Cavaliers, he will be able to save millions of dollars every year. Of course, these expenses are irrelevant to James. You must know that his annual off-court income is much higher than his on-court income. His off-court income in 2023 alone will exceed US$70 million. It is not difficult to understand why. Those NBA stars are trying their best to make money by investing in the business world.

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