Washington is one of nine states with no state income tax. Within those nine states are six NHL teams:

• Florida Panthers (Florida)
• Tampa Bay Lightning (Florida)
• Dallas Stars (Texas)
• Nashville Predators (Tennessee)
• Vegas Golden Knights (Nevada)
• Seattle Kraken (Washington)

NHL teams span the United States and Canada, and income tax rates vary by country, state, province, and city.

Let’s start with a blanket disclaimer. Taxes vary significantly based on an individual’s situation. This article will focus on how income tax applies at a high level.

First, we’ll look at how NHL players are taxed and run through some hypothetical examples. Then we’ll determine whether the Kraken benefit from playing in a state without an income tax.

Types of income tax

Income taxes can be assessed at the federal, state or provincial, and city levels. Many jurisdictions use marginal tax rates.

This chart shows the top marginal tax rate for each team’s location, which provides a rough indication of how states rank from lowest to highest income tax.

Looking at this graph alone, it appears the Kraken and other no-income-tax teams have a significant advantage when it comes to signing players. But the way taxes are calculated is more complicated and is not based solely on a player’s team location.

Duty days

NHL players don’t just pay taxes where their team is based. They can also owe taxes in locations where they travel for work. These are calculated using “duty days.” Games, practices, team meetings, road travel, and other team-related activities can count as duty days.

There are 185 days in the NHL regular season. With training camp and preseason added, we’ll round that number to 200 duty days.

For example, the Seattle Kraken will travel to Boston this season. Let’s assume they spend two duty days in Massachusetts and the player makes $10 million per year (there are no Kraken players making $10 million currently, but this gives us easy math).

Massachusetts has a 5 percent state income tax if income is under $1 million. The player’s Massachusetts income would represent two of his 200 duty days.

The calculation would be:

This calculation continues for each state or province where the player works.

Crossing the U.S.-Canada border can add another layer. So can playing in cities that impose their own income taxes. You can see how this gets complicated quickly.

Profile players

Let’s look at estimated taxes for players across all 32 NHL teams.

We’ll use five salary levels: $900,000, $3 million, $6 million, $10 million, and $15 million.

The model assumes 88 games, including an 84-game regular season and four preseason games.

It also assumes two duty days for each of 44 road games. That produces 88 road duty days and 112 home duty days.

The 84-game regular-season schedule breaks down as follows:

• Four games against each divisional opponent: 28 games
• Three games against each non-divisional conference opponent: 24 games
• Two games against each team in the other conference: 32 games

Divisional and interconference matchups have equal numbers of home and road games.

The three-game conference matchups are different. Some teams will play twice at home, while others will play twice on the road.

That creates some variability because the tax rate depends on where those additional road games are played.

Division and conference alignment also matter.

Division	Average tax rate
Pacific	46.8%
Atlantic	46.5%
Metropolitan	45.7%
Central	42.4%

Canada and California have some of the league’s highest income tax rates. The Pacific Division includes six teams from Canada and California which causes an uptick in the division due to road duty days in high-tax locations.

Residency

The player profiles above assume the player establishes tax residency where their NHL team is located. If they do not, taxes will also depend on the rules of their primary residence.

Every jurisdiction has different residency rules. However, several factors commonly help determine someone’s primary tax residence:

• Maintaining a permanent year-round residence
• Where a spouse or children live
• How much time the person spends in a jurisdiction

Residency is highly dependent on each player’s circumstances. Establishing residency can be easier when a player’s spouse and children move with him and maintain a year-round home.

It can be more difficult for young prospects. Players on entry-level contracts may find it harder to afford a year-round residence, and without a spouse or children they may have fewer personal ties that support establishing residency there.

The key here is just because a player plays in a high-tax location, such as Toronto, does not necessarily mean all his income faces Toronto’s tax rate.

Signing bonuses

Another wrinkle in taxes is how NHL compensation can come in the form of salary or signing bonuses.

The Canada-U.S. tax treaty handles signing bonuses differently from regular salary. Tax on qualifying signing bonuses can be capped at 15 percent.

This can particularly benefit U.S. residents playing in Canada.

For example, a U.S. player in Canada would pay only 15 percent Canadian tax on a qualifying signing bonus. He would then owe up to an additional 22 percent (to get to 37 percent) in U.S. federal tax on that income, subject to applicable foreign tax credits.

Auston Matthews example

Auston Matthews is an Arizona resident for tax purposes. He maintains a year-round home there and has family ties to the state.

His contract also pays most of his compensation through signing bonuses.

About 94 percent of his four-year contract comes through signing bonuses, totaling $49.65 million of the $53 million contract.

His actual salary is therefore near the league minimum. Matthews is scheduled to earn $11.08 million in 2026-27. Of that, $10.18 million is a signing bonus and $900,000 is salary.

Here’s how the estimated tax bill breaks down:

• $1.53 million: 15 percent Canadian tax on the $10.18 million signing bonus
• $2.19 million: Approximately 22 percent additional marginal tax to the IRS
• $254,000: Arizona state income tax at 2.5 percent
• $451,000: Estimated duty-day taxes tied to his $900,000 salary

Despite Toronto’s overall top income tax rate of roughly 53.5 percent, Matthews’ estimated effective tax rate is about 39.9 percent.

That leaves approximately $6.66 million of his $11.08 million in compensation after income taxes.

Leo Carlsson example

Let’s look at another player who has been all over hockey news after signing an $18 million offer sheet.

Leo Carlsson is a Swedish citizen who plays in another high-tax location: Anaheim, California.

Roughly 95 percent of Carlsson’s $90 million contract, or $85.3 million, comes through signing bonuses.

For the upcoming season, he will receive a $19.95 million signing bonus and $850,000 in salary.

Here’s how the estimated tax bill breaks down:

• $7.33 million: 36.75 percent federal income tax
• $2.62 million: 13.15 percent California state income tax
• $435,000: Estimated duty-day taxes on his $850,000 salary

Carlsson will earn $20.8 million and pay an estimated $10.39 million in taxes, an effective rate of 49.95 percent.

That assumes he is considered a California resident for tax purposes. Carlsson spends his offseason in Sweden. If Sweden is considered his tax residence, he could also be subject to Sweden’s tax rules. Using a Swedish income tax rate of 50.6 percent, Carlsson could owe roughly another $125,000 as a tax top-up.

Had Anaheim not matched the offer sheet, Carlsson’s estimated take-home pay in Philadelphia would have increased by about $870,000 to $11.26 million.

Stanley Cup champions

Going back to the 2005 lockout, 17 of the past 21 Stanley Cup champions come from teams that rank in the league’s lower half in terms of income tax rates.

The trend becomes even more pronounced recently.

The past seven Stanley Cup champions have come from eight teams ranked in the league’s lowest-tax quartile. Those eight include the six teams in states without an income tax, plus Colorado and Carolina.

Does this help the Kraken?

The short answer is yes, but the benefit depends heavily on each player’s tax residency.

When a player establishes residency where his team plays, the difference can be substantial. In some examples, take-home pay differs by 30 to 35 percent between the lowest- and highest-tax locations.

Across every salary level in this model, Seattle ranks among the six teams with the lowest estimated taxes. Those six are all the teams located in states without a state income tax. However, players need to establish Washington as their tax residence to realize the full benefit.

Philipp Grubauer lives in the Pacific Northwest year-round. Former Seattle Kraken, Jamie Oleksiak, used to call the Seattle area home year-round. Many players, however, spend their offseason somewhere else.

Non-U.S. players could receive a significant tax benefit from establishing residency in Washington. U.S. players can benefit as well, although the difference may be smaller unless they are coming from places such as California or New York City.

For the right player, the tax savings could make Seattle financially attractive.

Millionaires’ tax

Washington has passed a millionaires’ tax scheduled to take effect Jan. 1, 2028. That could significantly reduce Seattle’s current tax advantage for NHL players.

For stars earning north of $10 million, the new tax would put Seattle in the top third of the league’s highest tax locations.

For established middle-six players, Seattle would move closer to the middle of the league, while it would remain one of the lowest-tax locations for prospects and players earning near the league minimum.

Jason Robertson provides an interesting example.

Robertson recently rejected a $15 million contract from the Kraken and eventually signed a one-year, $12 million deal with Dallas.

At first glance, leaving $3 million on the table seems remarkable. But once Washington’s millionaires’ tax takes effect, the estimated take-home amounts become much closer. As shown above, a $15 million Seattle salary would produce approximately $7.7 million in take-home pay. Recognizing Robertson’s new deal will expire before the new tax kicks in, it’s still worth noting that a $12 million salary in Dallas would produce approximately $7.3 million in take-home pay.

That’s a difference of only about $400,000, and that’s before we take into account the fact that the cost of living is at least 25 percent cheaper in Dallas compared with Seattle.

It’s still meaningful money, but a $400,000 delta between the Seattle offer and the Dallas offer is nowhere near the $3 million discrepancy we saw on the contracts’ face values.

There is obviously more involved in Robertson’s decision than taxes. Still, the example illustrates how different income tax rates can produce surprisingly similar take-home pay.

Final thoughts

I know everyone’s favorite topic is taxes, but all good things must come to an end.

There are also factors beyond NHL salary, including endorsements or sales tax, that can further complicate a player’s tax situation. Ultimately, taxes need to be evaluated player by player. Residency, contract structure, family circumstances, and salary levels can all change the equation.

Seattle’s lack of state income tax does provide the Kraken with an advantage today, but how meaningful that advantage is depends on the player. And beginning in 2028, the equation could look much different.

If you have any questions, please leave them in the comments below.