Estimating what percent of their salary a UFC fighter takes home.

[acannxr]

We'll look at best/worst case in California for $100k and $ 1 million, and we'll look at best/worst case in Florida for $100k and $1 million. California and Florida are being used in these examples because they're the states with the most UFC fighters and they just so happen to have the min/max range for state taxes.

There's a TLDR at the bottom in case you don't want to read through each example.​

Federal Tax: 22-37%
State Tax: 0-13.3%
Independent Contractor Tax (1099): 15.3%
Management Fee: 10-20%
Gym: 5-10%
Coach/Medical/Etc. Fees: $2,500-$,4,000

Best-Case-Scenario-Florida-$100k
-10% (Management)
-5% (Gym)
-$2,500 (Misc.)
$82,500 (Taxable Income)
-22% (Federal)
-15.3% (IC)
$51,727.5 (51.72%)

Worst-Case-Scenario-Florida-$100k
-20% (Management)
-10% (Gym)
-$4,000 (Misc.)
$66,000 (Taxable Income)
-22% (Federal)
-15.3% (IC)
$41,382 (41.38%)

Best-Case-Scenario-Florida-$1 million
-10% (Management)
-5% (Gym)
-$2,500 (Misc.)
$847,500 (Taxable Income)
-37% (Federal)
-15.3% (IC)
$404,257.5 (40.42%)

Worst-Case-Scenario-Florida-$1 million
-20% (Management)
-10% (Gym)
-$4,000 (Misc.)
$696,000 (Taxable Income)
-37% (Federal)
-15.3% (IC)
$331,992 (33.19%)

Best-Case-Scenario-California-$100k
-10% (Management)
-5% (Gym)
-$2,500 (Misc.)
$82,500 (Taxable Income)
-22% (Federal)
-9.3% (State)
-15.3% (IC)
$44,055 (44.05%)

Worst-Case-Scenario-California-$100k
-20% (Management)
-10% (Gym)
-$4,000 (Misc.)
$66,000 (Taxable Income)
-22% (Federal)
-9.3% (State)
-15.3% (IC)
$35,244 (35.24%)

Best-Case-Scenario-California-$1 million
-10% (Management)
-5% (Gym)
-$2,500 (Misc.)
$847,500 (Taxable Income)
-37% (Federal)
-13.3% (State)
-15.3% (IC)
$291,540 (29.15%)

Worst-Case-Scenario-California-$1 million
-20% (Management)
-10% (Gym)
-$4,000 (Misc.)
$696,000 (Taxable Income)
-37% (Federal)
-13.3% (California)
-15.3% (IC)
$239,424 (23.94%)

In Summary

• Percent range for $100k American: 35.24% to 51.72%
• Percent range for $1 million American: 23.94% to 40.42%

Additional comments:

• Some fighters don't have managers, but I don't think that's the norm.
• The above examples assume one fight, otherwise miscellaneous fees would be multiplied accordingly, but at the same time the UFC does cover some of these expenses, so it likely evens out in the end.
• There is such a thing as international taxes, but most countries have tax treaties with the United States, which is why I didn't include them as a factor.
• The cost of training camp is not included in these figures due to how much they vary, but with their inclusion they would be tax deductible.

References:
Independent Contractor Tax
Federal Tax Bracket
California Tax Bracket
Gym, Management, Misc. Fees
Misc. Fees #2 Source, Intl. Tax
Management #2 Source

 

[myjohnson9]

So best case scenario they get less than half? Do you wanna be a fuckin fighter?

 

[Kdup]

Nice thread bro. If I was a fighter I would be looking into LLC’s to try and “reinvest” in myself as a business and hide some of that money. Get a crafty accountant. Or something. Cool info though.

 

[El Fernas]

For the best scenario you should go with the states that host more events, Nevada might be at the top and they dont do state taxes (i believe).

 

[acannxr]

For the best scenario you should go with the states that host more events, Nevada might be at the top and they dont do state taxes (i believe).

Nevada has the same tax rate as Florida (0%).

 

[Lint]

Since half of UFC fighters are from Brazil, let me add the tax for foreign income of any sort is 27.5%.

Suddenly one million seems so little.

 

[Threetrees]

Meh
that's not actually that bad, around what I imagine without crunching numbers
30% in the worst case is gym and management fees, that's essentially overhead

The IC tax is the fucked up part, because the UFC doesn't really treat fighters as ICs except when it suits them

 

[xHeadx]

Good start but a lot of expenses are missing that can be deductions to lower the tax rate. This is a benefit for an IC. Take home may end up in a similar range though.

A fighter making 100k gross is not going to be in the 100k bracket. Too lazy to check but I'm willing to bet athletes can make a crap load of deductions that most ICs can't.

EDIT: On my phone & didn't see your full post so it's likely you know this. Would take average of expenses based on 3 events per year.

 

[El Fernas]

Nevada has the same tax rate as Florida (0%).

Nice, i thought Vegas was special because of this (im not from the US).

 

[acannxr]

Since half of UFC fighters are from Brazil, let me add the tax for foreign income of any sort is 27.5%.

Suddenly one million seems so little.

Tax treaties prevent people from getting taxed double.

Good start but a lot of expenses are missing that can be deductions to lower the tax rate. This is a benefit for an IC. Take home may end up in a similar range though.

A fighter making 100k gross is not going to be in the 100k bracket. Too lazy to check but I'm willing to bet athletes can make a crap load of deductions that most ICs can't.

EDIT: On my phone & didn't see your full post so it's likely you know this. Would take average of expenses based on 3 events per year.

I know about deductions, I just don't know specifically what can be deducted for a UFC fighter being an independent contractor.

Nice, i thought Vegas was special because of this (im not from the US).

See here for more states with no income tax.

 

[mkess101]

You don't even need an expensive accountant to significantly lower those tax rates. Just a decent one would easily do it.

That said, even taking that into account it's still incredible how little the fighter actually takes home from his fight purse.

 

[FireKidWS]

Miss @FrankieNYC.

His insight here would be beneficial.

Interesting thread though TS.

 

[momchamp]

Good thing Dana is paying everyone so well that the %'s don't hurt that much.

 

[Pain4Pain]

Makes sense why the pioneers from the start to the mid 2000's are broke these days and wish they did something else.

Comparing MMA to boxing, the overhead costs of boxing are much lower, and the pay at the championship level is generally much better, but a much deeper sport to crack.

I heard from a friend who was picking boxing promo's to sign, claimed one well-known promo wanted 40% of profits to sign and build him up, whereas the competitor only wanted 20%. The latter stable holds many more boxers btw, a lot of them from Mexico

 

[Metheus]

You dont pay taxes on Reebok coupons, at least they have that going for them

 

[Threetrees]

I think on the more human side this just shows how predatory the fight business is, and how egregious win bonuses are in this day.
Also it shows why most champions and really top level fighters fight risk averse
Imagine going from making 500k as a champion, and clearing lets say 75K after all expenses and taxes to going back to 100k or 50/50

You can also see why a guy like Mighty Mouse who made like 300k disclosed might not hunting for massive paydays when super fights were dangled infront of him.

MMA is a predatory business, from promoters to management.

 

[acannxr]

Comparing MMA to boxing, the overhead costs of boxing are much lower, and the pay at the championship level is generally much better, but a much deeper sport to crack.

Ah, but the fun doesn’t stop there. “If the guy has a manager or advisor, that guy will make about 20 to 25 percent of what the fighter makes from the fight,” says Trillo. “The promoter will make another 20 to 25 percent off the fighter’s side of the purse.” Boom, another half gone!
https://melmagazine.com/en-us/story/the-economic-breakdown-of-a-boxing-purse-who-gets-what

And boxers are also considered independent contractors, so they too pay the 15.3% tax.

So if a boxer has a manager and promoter, in some cases it could be worse.

 

[acannxr]

I think on the more human side this just shows how predatory the fight business is, and how egregious win bonuses are in this day.
Also it shows why most champions and really top level fighters fight risk averse
Imagine going from making 500k as a champion, and clearing lets say 75K after all expenses and taxes to going back to 100k or 50/50

You can also see why a guy like Mighty Mouse who made like 300k disclosed might not hunting for massive paydays when super fights were dangled infront of him.

MMA is a predatory business, from promoters to management.

You can also appreciate why fighters were so upset by the Reebok deal.

 

[TheLastEmperorReurns]

Nice thread bro. If I was a fighter I would be looking into LLC’s to try and “reinvest” in myself as a business and hide some of that money. Get a crafty accountant. Or something. Cool info though.

That’s the managers job and I wonder how many of them are smart enough to do this.

From the ones that I know of, I’m guessing an IQ range of 105-114- which isn’t bad.

 

[Sir Punchalot]

I know about deductions, I just don't know specifically what can be deducted for a UFC fighter being an independent contractor.

How about the other things you listed? Management costs, gym costs, miscellaneous, etc. You don't pay tax on the gross, obviously.