This is How Overseas Basketball Players Pay Taxes (How Often, How Much and What Way)
Do overseas Basketball players pay taxes?
In the higher levels of overseas basketball, teams will commonly deduct taxes directly out of a player’s salary prior to paying them.
Meanwhile, lower-level overseas teams will pay players their gross amount (tax-free), putting the onus on athletes to report their income on their year-end tax returns.
In this way:
Lower-level players would then get taxed by their federal government(s) when it is time to report their income at the end of the year.
So - yes, one way or another - every overseas basketball player will have to pay taxes.
It’s just a matter of when - not if.
Let’s unravel this concept a bit further - starting with the top-level players.
Overseas basketball players must pay taxes but depending on their level and country it can vary.
Overseas basketball TAXES
In the top overseas leagues - e.g. EuroLeague - it is common practice for teams to take care of its players’ individual tax bills.
That includes:
Understanding what tax bracket the player is in
Understanding what foreigner & local tax may apply
Getting the proper dollar amount deducted
Abiding by local taxation regulations
Filing it all with local government officials
In the end:
That means all these top-tier players have to do is:
Collect their paycheque
Declare the amount to their home country’s government
Remember that last part:
Even though your team may pay the taxes on your basketball contract, you still have to declare your income with your local government.
Your team (likely) won’t help you with that.
Take Mike James of AS Monaco (France, LNB Pro A) for example.
James - who is American - is reportedly earning $2 Million for the 2023 season.
But in reality:
James probably grossed much more - something like US$4 - $5 Million per year.
Remember: European outlets and teams report salaries (The NBA does the opposite - reporting contracts prior to deductions).
Regardless:
James would have to declare his income to the US government.
EuroLeague contracts are announced post-tax while NBA contracts are reported pre-tax - making a big difference in public perception.
Please note:
I am not a tax advisor! Nor do I know the ins and outs of France, the U.S. - or any taxation system in the world for that matter.
But I do know the federal government wants every dollar earned to be accounted for.
You can bank on that (pun intended).
Something else to consider:
Longer seasons vs. shorter seasons.
If you are living in another country for the majority of the year due to the season length (think Europe) - then it’s possible you’ll have to pay taxes in:
Your playing country (where you are hooping)
Your home country (where you hold a passport)
But each country’s tax agreement will be different with your home country.
So again - go speak to an international tax accountant/advisor if you have doubts.
Overseas Basketball YouTube Channel
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Overseas Basketball YouTube Channel 〰️
Evidently:
Going through these big contracts with a tax advisor is much more realistic at the highest levels of overseas basketball.
After all:
These clubs are the best of the best.
And they will have the resources necessary to make sure everything is in order and done properly.
6 ways to convince any Overseas coach/team to take you:
— Jose Colorado (@ColoradoURB) March 24, 2023
1. You know the coach/owner
2. Someone recommends you
3. You’re a national
4. You’re an ELITE talent
5. You have hometown roots
6. You fill a team void (height)
The more you stack up, the more likely you get a contract.
In comparison:
Lower-level overseas basketball players won’t have this luxury.
Instead:
The onus will be put squarely on you so that everything is done correctly - and legally.
So I’d recommend going to a tax accountant.
But don’t worry.
If you’re playing at the lower-levels, it’s really not that complicated.
Just make sure to keep track of:
Contract(s)
Dollars earned (bonuses, incentives, food, base salary)
Work expenses for potential write-offs (e.g. shoes, recovery tools)
Since the dollar amount is usually relatively low in lower-level overseas leagues (i.e. not hundreds of thousands of dollars), it’s a pretty simple process.
Ultimately:
If you have any concerns then talk to your club and/or tax advisor so you can double-check everything.
How do overseas basketball players get paid?
Overseas basketball players can get paid in multiple ways including cash, direct bank deposits or even cheques.
Generally speaking, the higher the overseas basketball league, the more formalized the payment process will be (e.g. bank accounts, signatures required).
With that being said:
It is still very common for players to be paid in straight cash, homie.
But this is usually at the lower-levels of overseas basketball.
That’s what happened with me.
It was then up to me to put that money into a secure bank account.
So I opened an international bank account so I knew my money was safe and sound.
Another option:
Store the cash in a safe spot until it’s time to go home.
Yes - believe it or not - that’s what the majority of my teammates did.
But - in my opinion - that’s a recipe for disaster.
After all:
At the lower-levels of pro basketball, you could have:
Multiple roommates
Frequent visitors
A shared living space
Cleaners coming in and out
…and more.
Imagine someone stealing 9 months worth of your hard work because you had your cash stashed under your mattress.
Not on my watch. I’m not taking the chance.
On the flip side:
Higher-level overseas leagues will typically skip the cash altogether for this very reason.
Instead:
Electronic transfers/deposits are the way they operate.
And that makes sense.
With so much more money being moved around, security is all the more important.
You don’t want $100K in cash lying around.
My friend, Kevin Owens, played in some of the higher-levels of overseas basketball.
So make sure to check out his book (below) if you’re interested in hearing about more first-hand experiences of how the higher-levels of overseas basketball works.
Regardless of where you are:
Usually clubs will require you to sign a “confirmation of payment” notice.
This basically ensures you:
Have a recorded transaction of being paid
Have a point of reference if there is a future dispute (BAT)
Have a recorded transaction for future references (taxes)
These type of insights are exactly what I teach my clients in my 1-1 consultation sessions so that they are prepared for overseas basketball.
So if you’re interested in getting your career started on the right foot then make sure to book an appointment below.
How often do overseas basketball players get paid
Overseas basketball players are frequently paid on a bi-weekly or monthly basis. But if a player is cut prior to their payment period, then their salary is usually pro-rated for the number of days they performed their duties with the team.
Let’s break down that last scenario:
Players are always getting cut.
Every month.
Every week.
Every day.
Somewhere in the world, someone is getting cut from an international club.
Regardless:
You should still be getting paid for the number of days you were (actively) with the team.
For instance:
Let’s say you signed a contract in Germany - where I previously played.
You’re promised payment on the 1st of every month.
But suddenly you get injured on the 17th.
What happens?
Well, this can vary from team to team.
But usually the club will pay you for every single day you delivered your “service” (played or were practicing) for the team.
So in this case you would only receive payment up to the 17th of the month.
This is known as pro-rating.
However, in this scenario:
It’s possible some teams would pay you for the entire month since over 50% of the month is done.
That’s nice.
But I wouldn’t necessarily bank on it.
Another consideration:
Some teams will have separate payment schedules for your:
Base salary
Food
Bonuses/incentives
For instance:
When I was playing in El Salvador, I received:
My base salary on the 1st of every month
But my food payments happened every two weeks (bi-weekly)
Bonuses were paid in full at the end of the season
Meanwhile:
Others may have all of their payments happen on a single day.
In either case:
Make sure you know when you should be expecting your payments.
Write it into the contract.
That way you can hold your team accountable in the event they miss a payment.
Overseas basketball teams will have different payment schedules depending on the situation.
why do athletes go broke
Some of the leading causes behind athletes going broke are a lack of financial knowledge, lifestyle inflation, impulse buying, poor investment decisions, lack of skills outside of sports and a short earning window.
Typically:
Fans will associate athletes going broke with the highest-profile names (think ESPN’s 30-for-30 Broke documentary).
But this can also apply to the lower-levels as well.
After all:
Whether you are in the NBA or a lower-level professional league, an athlete must commit a large portion of their life to the sport.
In that way, other parts of an athlete’s life are sacrificed.
JOSE COLORADO SOCIALS
Otherwise:
They would not be a professional athlete to begin with.
In the end, athletes can be left with huge gaps in:
Financial knowledge
Common sense knowledge
“Street skills”
Life skills outside of sports
…etc.
All of these factors make athletes much more prone to financial difficulties when the ball stops bouncing.
So it’d be in your best interest to get financially educated while you’re still actively playing.
Otherwise, you too are prone to making critical financial mistakes.
Below is one of my favourite beginner books for those seeking some practical financial knowledge.
Let’s imagine a possible scenario together.
Say you are a professional basketball player in Italy’s Serie A.
Here, you earn US$500,000 per year.
Because you earn quite a bit - you buy:
A big house
Two fancy cars
Now:
During your playing days, there are no issues.
The paychecks are rolling in.
You keep making payments on your house and cars - and all is well.
But one day:
You get injured.
Your team decides to not renew your contract at season’s end.
And you’re left jobless.
But make no mistake about it.
Those house and car payments will still keep rolling in.
And if you weren’t financially smart enough to set aside some cash, then you’re screwed.
That’s why it’s up to you - the athlete - to fill those knowledge gaps.
For a major league pro athlete (NBA), this will be easier.
They can hire the:
Best teachers
Best advisors
Best mentors
Best consultants
But for the lower-level pro athlete, you must be proactive.
Here’s the first financial book I ever read as an athlete.
It helped me get on my way to think as a basketball entrepreneur!
How do athletes make money after they retire
Many athletes are able to make money after they retire by leveraging their name and image into business opportunities, sponsorships, sports management positions, coaching gigs and more.
Athletes typically will also have a unique - and potentially powerful - network to pull from.
No matter which path you choose post-retirement, the key is to get started.
If you are nearing your retirement or are already retired - then you are already behind the eight ball.
But I get it.
You’re a baller.
You live and breathe sports.
You just want to focus on your athletic career.
Nothing else.
Trust me.
I’ve been there.
But the reality is the ball can only bounce for so long.
And a professional athlete’s career earning window is quite small.
My recommendation?
Develop these habits during your playing career:
Basic baseline of financial literacy (investing, liabilities, assets etc.)
Develop one other "income-earning” skill outside of basketball
Develop one other skill you enjoy to do (could be same as “income-earner”)
Develop an idea of what life looks like post-basketball
If you can do this, then you will (most likely) be more financially secure in your career.
Get immediately started on side hustles during your off-time.
Try to get a better idea of what you could potentially be good at outside of just playing the sport itself for money.
Whatever you find here can develop into income-earning opportunities post-retirement.
From there, you can build them into long-term streams of money.
CONCLUSION
So there you have it.
Depending on your level, overseas basketball players will pay their taxes in different ways.
While high-end players will commonly have teams pay take the taxes directly out of their salaries, lower-end players will have to report their own incomes and work with an independent tax advisor.
Regardless:
It is important all professional players understand what is required of them when they are earning an overseas basketball salary and how taxes work.
What has your experience with taxes as a basketball player been like?
Comment below!
Jose Colorado is a 6-year professional basketball player helping others achieve their dreams of pro basketball with a proven and tested approach to overseas basketball.
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