San Francisco 49ers defensive lineman Arik Armstead took to social media platform X, formerly known as Twitter, on Sept. 25 to explain how the NFL’s game check structure works. The University of Oregon graduate posted a series of videos briefly explaining to the general public who may be familiar with his day job but not how the finances operate.
Armstead explains what it means for a player financially when the team converts their base salary into a signing bonus before explaining how taxes on an NFL game check work.
Armstead says, “So the tax section breaks down all the taxes that were taken out every game check before you ever receive it. Some people pay taxes from the money they make, but they take out taxes beforehand.” Armstead continued.
“So you see, right here, you have this M.E.D. or med, which is probably some sort of medical tax or Medicare or Medi-Cal. You have the federal tax, which is probably the most hefty, is $144,000; you have your state tax, which is $40,000; and then you have the total, which you pay in taxes, which is $194,000 out of my game check.”
Motivational and Educational purposes only !!#nfl #49ers #money #financialliteracy pic.twitter.com/rxTW5T9Mst
— Arik Armstead (@arikarmstead) September 26, 2023
Users asked him different questions about tax deductions, and someone noticed Armstead contributed the maximum amount to his 401(K) pension plan.
Armstead also noted that the NFL does not allocate any sick or vacation time for players, who are often expected to play through injuries if possible. He does say that there is an NFL off-season, however, and many players choose to use that time to go on vacation, or some will do a “working vacation” where they’ll work out in a location like Cabo San Lucas like former Dallas Cowboys running back Ezekiel Elliott.
Armstead’s salary was recently converted into a signing bonus, and the team created $41 million in hard cap space, that is, the money a team has available to spend on player salaries. As a result of the moves to convert Armstead, tight end George Kittle, and left tackle Trent Williams’ contracts into signing bonuses, the speculation is that it will allow the team to give one more player a bigger piece of the pie.
However, that speculation is tempered by the fact that the Niners have cash now, but in the 2024 fiscal year, they have big contracts hitting their books. According to Spotrac, a contract tracking website, in 2024, the team will have about $4 million in cap space if they attempt to retain all their players currently under contract. As Armstead alluded to, teams often use this tactic to essentially create cap space that they don’t actually have, which can sometimes put players in positions where they make less than you would expect, as Arik Armstead’s game check of $200,000 even though his cap hit for 2024 sits at almost $29 million.
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