As one of the four major sports in North America, becoming a hockey player can be a lucrative career. For players in the National Hockey League (NHL), the world’s top hockey league, their earnings depend on their skill level and role on the team.
Player salaries have grown considerably over the years, leading to the NHL introducing a salary cap in 2005. One resource that tracks player salaries is CapFriendly, but NHL players don’t receive every dollar of their contracts. Let’s look into why this is the case.
Paying Escrow in Hockey
During the 2012-13 NHL lockout, the league and its players had a dispute over their collective bargaining agreement. The team owners wanted a 50/50 split of all hockey-related revenue, which the players weren’t on board with initially, but eventually settled.
However, player salaries often exceed 50 percent of the NHL’s revenue. As a result, the league requires a third-party fund to hold a certain percentage of player salaries, also known as escrow. It ensures a 50/50 split of revenue between the players and owners.
For example, the league withheld 9.5 percent of player salaries during the 2018-19 NHL season. It meant that every NHL player would take a 9.5 percent cut to their earnings from that season. After paying escrow, there’s an even bigger cut to a player’s salary.
Paying Taxes in Hockey
Like the general population, NHL players aren’t exempt from paying local taxes. It varies significantly between American states and Canadian provinces, with Florida and Texas on the low end and Quebec and Ontario on the high end of this local tax spectrum.
Many people believe this can impact where a player signs in free agency, with some concerned with maximizing their post-tax earnings. Therefore, explaining how much a hockey player earns isn’t as simple as referring to their salary in any given season.
For instance, John Tavares of the Toronto Maple Leafs was the highest-paid player during the 2018-19 season, earning $15.9 million. If you calculate his total earnings after paying escrow and income tax in Ontario, it’s closer to $6.75 million for the year.
Calculating average salaries in Hockey
To highlight the wide variance in average earnings across the NHL, we can take the league’s average salary in 2018-19, as well as the 9.5 percent escrow rate from that season, to calculate a player’s net income in both the lowest and highest local tax rates.
According to Statista, the average player salary in 2018-19 was around $2.78 million. A hockey player would pay the most income tax with the Montreal Canadiens, reducing their net income to just under $1.2 million after paying escrow and taxes.
As for the low end of local tax rates, a player would earn roughly $1.56 million playing with the Dallas Stars, Florida Panthers, Nashville Predators, or Tampa Bay Lightning. The median is the Philadelphia Flyers, earning about $1.39 million after escrow and tax.
Even though there is a large variance in salary, it’s clear that Ice Hockey pays much more than some other extreme sports such as BMX. So perhaps a career in the Ice Hockey is a wise move!
Final thoughts on Hockey Players Salaries
While hockey players don’t earn every dollar of their contracts, there are useful resources to determine how much a hockey player makes after paying escrow and income tax. Ultimately, the best answer is between $1.19 million and $1.56 million.
We hope this has been helpful for you in learning how much hockey players make, but feel free to leave a comment below if you have any questions! Let us know who you think are some of the more underpaid and overpaid hockey players in the NHL!