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Shohei Ohtani will put pen to paper on the biggest deal in American sports history when he inks his $700 million contract with the Los Angeles Dodgers.
But the figures involved may not be as lucrative as they seem when the taxes are deducted.
Baseball star Ohtani will surpass the likes of Lionel Messi and Patrick Mahomes after he signs the 10-year contract with the MLB franchise, having turned down a massive offer from the Toronto Blue Jays during free agency.
It smashes the previous record set by Los Angeles Angels superstar Mike Trout, Ohtani's former team-mate, who signed a 12-year deal worth $426.5m back in 2019.
However, Ohtani won't need telling that the taxes for athletes are already astronomical - and even his deal will be subjected to the same eye-watering deductions from the IRS.
The huge figure Ohtani must pay in taxes
The 29-year-old stands to earn a record $700m over the course of the next decade, which means his salary on paper reads at $70m per season.
He stands to earn a much lower sum when the taxes are taken away, though, with his net income estimated to be around $33.6m. That means he will be paying around $300m in total taxes on the record-breaking contract until he is 39.
According to U.S tax expert Robert Raiola, Ohtani will pay 37 per cent federal tax, 13.3 per cent California tax, a 2.35 per cent Medicare & Medicare surcharge and 1.1 per cent for State Disability Insurance (SDI).
The contract reportedly has 'significant deferrals', and he will pay approximately 53.75 per cent in federal, State and payroll taxes.
Still, Ohtani's rapid rise will allow him to cash in elsewhere and make up the shortfall, with personal sponsorship deals likely to come his way as a result of his newfound fame.
