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2019-20 Miscellaneous NHL/Hockey News Thread

What are the taxes like in Toronto and Canada? I calculated Aho losing 50% to taxes (37% Fed max rate, 5.25% NC tax and then 7.2% for Fed Social Security and Medicare taxes). I think the overall tax rate is higher than that for someone working in Toronto (although there are games that can be played to reduce the burden I believe?)
A friend in Canada who works for TD as a CFA says the overall tax hit would be 53.53% but likely sheltered a bit like you mention...
 
What are the taxes like in Toronto and Canada? I calculated Aho losing 50% to taxes (37% Fed max rate, 5.25% NC tax and then 7.2% for Fed Social Security and Medicare taxes). I think the overall tax rate is higher than that for someone working in Toronto (although there are games that can be played to reduce the burden I believe?)
IIRC Ontario and Quebec provincial taxes add another 5-10% to the tax burden for athletes. There's a lot of whinging about that out of Montreal during free agent season virtually every year, but I think a lot of people think that signing for teams in "no income tax" States in the US means that athletes don't pay any income tax at all. We know the biggest tax hit in the US is Federal and that low income tax States tend to be high other kinds of taxes States ... but details like that seem to slip people's minds when they feel disadvantaged by something. Seriously ... check out property taxes in Florida and tell me that it doesn't even out over time.
 
What are the taxes like in Toronto and Canada? I calculated Aho losing 50% to taxes (37% Fed max rate, 5.25% NC tax and then 7.2% for Fed Social Security and Medicare taxes). I think the overall tax rate is higher than that for someone working in Toronto (although there are games that can be played to reduce the burden I believe?)

I don’t think it matters for the players in the playoffs. Their 2019-20 regular season salaries have been paid.
 
I don’t think it matters for the players in the playoffs. Their 2019-20 regular season salaries have been paid.
IIRC playoff salaries are treated as bonuses, so they would be taxed as regular income in the US. It just isn't subject to escrow, I believe.
 
What are the taxes like in Toronto and Canada? I calculated Aho losing 50% to taxes (37% Fed max rate, 5.25% NC tax and then 7.2% for Fed Social Security and Medicare taxes). I think the overall tax rate is higher than that for someone working in Toronto (although there are games that can be played to reduce the burden I believe?)

Aho will have already maxed out his social security payments for the year. So that's 6.2% off the 50% rate. I agree with the overall point on the impact of taxes, though.
 
Good point on SS taxes, so give Aho back 6.2% of his bonus. That may change in future years if a certain party wins full control of Congress and the Preisdency in November.
 
Canadian Federal taxes:
  • 15% on the first $48,535 of taxable income, plus
  • 20.5% on the next $48,534 of taxable income (on the portion of taxable income over 48,535 up to $97,069),plus
  • 26% on the next $53,404 of taxable income (on the portion of taxable income over $97,069 up to $150,473),plus
  • 29% on the next $63,895 of taxable income (on the portion of taxable income over 150,473 up to $214,368), plus
  • 33% of taxable income over $214,368
Alberta’s Provincial taxes:
  • 10% on the first portion that is $131,220 or less
  • 12% on the portion from $131.220.01 up to $157,464, plus
  • 13% on the portion from $157,464.01 up to $209,952 plus
  • 14% on the portion from $209,952.01 up to $314,928, plus
  • 15% on the portion that is $314,928.01 and up
Ontario Provincial taxes:
  • 5.05% on the first portion of taxable income that is $43,906 or less
  • 9.15% on the portion of taxable income over $43,907 up to $87,813
  • 11.16% on the portion of taxable income over $87,813 up to $150,000
  • 12.16% on the portion of taxable income over $150,000 up to $220,000
  • 13.16% on the portion of taxable income over $220,000
 
Canada has a RCA sheltered savings program that the government allows for athletes. Taxed when it comes out in retirement. It lets the capital grow with a higher capital base so the capital grows exponentially.
 
Yeah, I read an article once on that Canada program, probably when they were talking about free agents and the disadvantages that some Canada cities have enticing players to sign because of taxes vs signing with Tampa or Florida (or Dallas or Vegas).

Not that NHL superstars are not very well paid, but the whole Cap/Escrow process and taxes does take a rather large bite out of their salary and bonuses. They still do rather well of course. But the NHL really won a major victory with the cap/escrow/profit sharing system contained in the past 2 CBAs. It appears this new CBA extension that should be finalized soon will help relieve some of the pain the players will face for at least a couple of years with Covid-19 revenues almost certainly plunging.
 
There are ways around the Canadian tax hits for pro athletes. Besides, if tax considerations drove pro athletes' free agent decisions, the Florida and Texas teams would all be super dynasties.
 
Yeah, I read an article once on that Canada program, probably when they were talking about free agents and the disadvantages that some Canada cities have enticing players to sign because of taxes vs signing with Tampa or Florida (or Dallas or Vegas).

Not that NHL superstars are not very well paid, but the whole Cap/Escrow process and taxes does take a rather large bite out of their salary and bonuses. They still do rather well of course. But the NHL really won a major victory with the cap/escrow/profit sharing system contained in the past 2 CBAs. It appears this new CBA extension that should be finalized soon will help relieve some of the pain the players will face for at least a couple of years with Covid-19 revenues almost certainly plunging.
The NHL (and MLB too) are one thing, but without that savings plan, Toronto, Montreal and Vancouver wouldn't be viable MLS markets at all. The mean pay range in that league is high enough to trigger a hefty tax hit but low enough where that causes real pain. And the depth guys who make $50-60,000 get hammered.
 
McKenzie says it’s Edmonton and Toronto. Conference Finals and Stanley Cup Final in Edmonton.



Here is the rationale for choosing Toronto.

 
Toronto hosts the Eastern teams and Edmonton gets the West by all accounts, the SiriusXM NHL guys were laying it out that way.
 
There was a article on tsn.ca I read yesterday that said the same thing, so I would call that confirmed.

The earliest date for full training camps has been pushed back from July 10 to July 13 as the NHL and NHLPA continue to hammer out all of the details on 'Return to Play' and the new CBA extension and adjustments. They need to get all of that done and voted on (2/3rd NHL owners, majority of NHLPA members) before anything can proceed with Phase 3 and 4. Apparently they are still haggling over things like limiting signing bonus values to a certain percentage of the overall contract (ie no more than 50%) and contract length limits. The owners want to stop the type of contracts like Aho is enjoying.

If anything good NHL related comes out of all of this nightmare, the fact that there will be a CBA in place through the 25-26 season AND the potential for the NHL to pause for the Olympics in 2022 and 2026 are 2 pretty welcomed pieces of news. Its so much better to hear that both sides are working towards CBA extensions than have to watch the lockout clock tick down. Of course in this case, both side really needed to accelerate work on the CBA as significant considerations related to how the next couple of years will work with COVID likely significantly impacting revenues were essential. The current CBA as written would have been completely unworkable for both sides if NHL revenues get pared in half (or worse) next season.
 
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Scott Burnside has the framework of the new CBA on The Athletic. The cap will remain at $81.5 million until revenue reaches $4.8 billion. After that, the formula will se revenue from 2 seasons prior to set the cap. Escrow will be capped at 20% next season, 14-18% in 21-22, 10% in 22-23 and 6% in the last 3 seasons. In addition to the escrow, players will defer 10% of next season’s salary which will be paid out in equal installments over 3 seasons starting in 23-24.

 
McKenzie says the league and PA have finalized tentative agreements the Phase 3/4 return to play protocols but are continuing to work on the CBA Memorandum of Understanding. The protocols are a 40 page document with roster sizes (30 with unlimited goalies) testing protocols, etc. Any player may opt out of Phase 3/4 without penalty but they have to notify their club by July 7. Teams must submit their rosters to the league by July 9.

 
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