Do you know how much income tax you pay? Have you ever sat down and calculated the exact amount? It will vary depending where you live, and if you have I applaud you. I did it once when I was younger, and I now I just know what my “ballpark figure” is.

Calculating my own taxes is about as exciting as a root canal, so having to calculate how taxes impact NHL players is near the bottom of my list of things I want to do for work.

However, it is becoming more of a factor in the NHL as team’s try to find ways to maximize their salary cap. A $9.5 million contract in Tampa Bay will give a player more net salary than a $9.5 million contract in Toronto according the the chart below. But is there more to it?

The chart courtesy of CapFriendly.com illustrates the difference in take home pay (net salary) for players in 31 different markets.

Tampa Bay, Nashville, Dallas, Vegas and Florida  (Top group) have the largest after tax take home ($5.351 million) while Toronto and Ottawa ($4.448 million) and Montreal ($4.458 million) (bottom group) have the least.

Edmonton and Calgary are tied for 18th in net salary at $4.968 million.

However the rankings between teams aren’t always the same.

For instance, a player with a $1 million salary in Edmonton would be tied for 22nd in net salary with $548,685. While a player in Montreal has the lowest net salary at $490,234 behind Toronto and Ottawa at $498,667. The Top Group is still at the top with players on those five teams netting $647,830.

The difference from top to bottom is over $150,000 on a $1 million salary.

Every NHL player is paid in American dollars, including those playing in the seven Canadian cities. So can Canadian players, who live year round in Canada, make up the tax gap by being paid in US funds.

A Montreal player with a $1 million salary who nets $490,234 US dollars will make $643,341 Canadian based on today’s exchange rate.

So that $643,341 is close to the top group’s $647,830. So the exchange rate could help players during the months they reside in Canada. But that only benefits them when the US dollar is as high as it is now, or higher, but when the Canadian dollar inches closer to even par this argument become moot.

The other factors we have to consider are cost of living, which is higher in New York, Vancouver and Toronto than in most other cities, but I won’t dive into that land mine.

I believe we will see some players, not all, look at tax implications when they sign with a team. But moreso if you are any of the Top Group teams, you should be using the tax implications as why a player can take a little lower salary, so the team has more money to spend on other quality players, because his net salary will still be the same as someone who makes more in higher taxed cities.

For instance. Nikita Kucherov just signed an extension worth $9.5 million, and if you compare that to John Tavares $11 million/year contract it looks like Kucherov took less. But if you look at his net salary it is virtually the same as Tavares in Toronto.

Tavares makes $11 million in Toronto and his net salary is $5.145 million, while Kucherov’s $9.5 million salary in Tampa Bay nets him $5.781 million. Kucherov still has a higher net salary playing in Tampa Bay, even though Tavares gets paid $1.5 million more in Toronto.

Leon Draisaitl makes $8.5 million in Edmonton and he will net $4.448 million, while Ryan Johansen makes $8 million in Nashville, but his net salary is still higher at $4.875 million.

**Now, keep in mind that the tax implications are mitigated a bit because when Tampa Bay players play a road game in Toronto or Ottawa, they pay that tax rate, but that is only on half their 41 games, and also depends on travel days etc. It isn’t exact as stated above, but it does illustrate the advantage Tampa Bay can have in getting their star players to take a lower cap hit, but still make as much money as other star players with a higher cap hit in different markets.***

Whether we like it or not, tax implications will likely become more of a discussion point when looking at players salaries from team-to-team. It isn’t as easy as saying player “A” signed for $4 million, so player “B”, who is the same caliber, needs to sign for the same amount.

It was very difficult to accurately compare players when we used points and analytics, but it could get muddier as more teams and players discuss the differences in net salary from city to city.

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