If the San Francisco 49ers want to ink a deal with Brandon Aiyuk rather than trade him to the Pittsburgh Steelers, they may have to pay a tax. Or rather, they may have to account for the taxes Aiyuk will have to pay as a resident of California. They haven’t gotten a deal done because the 49ers have balked at overpaying for him. To overcome the financial obstacle in this negotiation, then Aiyuk may force them to weigh the difference in tax burdens between a player for the 49ers and a player for the Steelers.
Brandon Aiyuk is prepared to play for either the 49ers or the Steelers, but he wants his fair compensation. And I’m very confident that his agent knows there is an economic advantage to playing in Pennsylvania. As Steelers Depot reader Jeff Flowers pointed out, the same contract would be worth millions more in the Keystone State.
Take a recent article by the Tax Foundation that looked into NFL contracts for the 2024 season. Their calculations factor in teams’ actual schedules this year. According to their data, on a $20 million salary, a player would pay $2,631,028 in state taxes in 2024 with the San Francisco 49ers. A player with the same salary for the Pittsburgh Steelers pays $861,355.
Players must pay state taxes in whatever state in which a game is played, so teams with schedules, including games in states with higher taxes, will have to pay more. Pennsylvania’s taxes are considerably cheaper than California’s, on top of that. I will note that the NFC plays nine home games this season, so Brandon Aiyuk would be paying California state taxes for 10 weeks, including the bye week, since that also counts as a game check.
The 49ers also play in some high-tax states on the road this year, including against the Los Angeles Rams, the Buffalo Bills, the Minnesota Vikings, and the Green Bay Packers. The Steelers don’t play in the state of New York this year, so Brandon Aiyuk would avoid their sales tax in Pittsburgh in 2024. They also don’t play in California this season. So on the whole, their road tax burden is less than San Francisco’s.
Aiyuk’s former San Francisco 49ers teammate Arik Armstead revealed last year that, on a $393,055 weekly check in the early portions of the 2022 season, he paid out $194,085 in taxes, or nearly half. Of that, $40,379.40 amounted to the California state tax. He played on a base salary of $1,120,000 that season.
The $40,379.40 figure, however, does include the weekly proration of his signing bonus. Even still, his weekly Paragraph 5 salary of $31,111.11 represents about 8 percent of the total check. That still translates to about $3,200 based on the Paragraph 5 salary alone on the equivalent of the out-of-state income. Aiyuk would likely have a similar Paragraph 5 salary, but obviously a very large bonus. And he would much rather have that taxed by Pennsylvania than California.
Given that the stub shows state taxes for California, Illinois, and Colorado, we can conclude that this must represent no more than the first four weeks of the 2022 season. The 49ers played the Broncos and Bears on the road and two home games before their third road game in Week 5. He only paid $1,415 in state taxes for the Broncos game and $1,540 for the Bears game. As noted above, his Paragraph 5 state tax burden for home games was likely in the vicinity of $3,200—or double.
Extrapolate these numbers over a larger contract, particularly with a big signing bonus that would exclusively face state taxes at home, and you can see how there is a cumulative effect. Let’s say the Steelers give Brandon Aiyuk a $50 million signing bonus. In Pennsylvania, via the Tax Foundation, he pays $2,153,569 on that. In California, he pays $6,621,028. Pennsylvania is in the bottom 10 for NFL teams, while California is at the top.
And California is the most expensive state in the country to live in, generally. Not that Aiyuk will struggle to afford housing or groceries, but it’s a factor players must consider. Every one of them plays for money, and you want your money to go further. By contrast, Pennsylvania ranks right in the middle of the pack of affordability. And on the western side of the state, that likely skews to the more affordable side.
So if Brandon Aiyuk is equally content to play for the 49ers or the Steelers, then he may feel it necessary to earn more from San Francisco than what Pittsburgh might offer. The latest reports indicated that the 49ers offered him $26 million per year but have re-opened lines of communication. We have estimated that the Steelers offered him $28-9 million per year. The 49ers may have to at least match, if not exceed that if they want Aiyuk to sign. Otherwise he could further pressure them to accept the Steelers’ offer after putting the kibosh on potential trades to the Browns and Patriots.
