On Friday afternoon, the NHL announced that the salary cap’s upper limits will rise from $88 million to $113.5 million by 2027-28.
As professional hockey in North America continues to grow, so do the NHL’s revenues, which means players can begin to see salary increases.
However, unless fans love to dive deep into the league’s financial landscape, many may not know that NHL players pay taxes in the states where they live and taxes in every city/state they visit on the road.
Ultimately, these multi-millionaires need accountants to prepare their taxes since every franchise plays 41 games on the road, meaning there are a lot of numbers to crunch to determine someone’s actual earnings.
So, with the announcement of the NHL’s salary cap increases, which appear to be going up by over $25 million over the next three seasons, the amount of money players pay in taxes is trending again.
Playing in a home market where the taxes are in a player’s favor can significantly affect whether or not someone is interested in signing in Florida, New York, Ontario, or Pennsylvania.
The Pittsburgh Penguins may have one of the lower tax totals of 32 teams, so let’s use Sidney Crosby’s contract to illustrate how the numbers work. In September 2024, the long-time Penguins captain signed a two-year extension worth $8.7 million a season.
According to figures by The Hockey News in their annual Money and Power publication, Crosby, who lives in Pennsylvania and is a Canadian citizen, is paying 36.35% towards U.S. Federal Tax.
He also contributes 1.78% to Social Security Taxes and 5.92% to State Taxes, which means he’s responsible for 44.05% of his wages to taxes. The 44.05% owed to taxes rank 22nd in the NHL, just three percentage points behind the Philadelphia Flyers (44.08%) and slightly ahead of the Chicago Blackhawks (43.73%).
Based on the taxes, which equal about $3,832,350, Crosby’s $8.7 million salary in Pittsburgh, PA, is about $4,867,650 at the end of tax season.
For comparison, if Crosby agreed to a $8.7 million deal with his favorite team growing up, the Montreal Canadiens, he’d be subject to 53.15% tax in Quebec. That means he’d owe $4,624,050 in taxes and take home $4,075,950, less than what he would pay the government.
However, if Crosby took his talents to Florida, a state without income tax, and signed with the Florida Panthers or Tampa Bay Lightning, he’d have more money in his pocket.
Despite living in a tax-free state,…