Hours before the 2024 NFL season began, Dallas Cowboys quarterback Dak Prescott signed a massive four-year, $240 million extension. The contract has made him the highest-paid player by annual average salary and will make Prescott a very, very rich man. However, with those millions in salary come millions in taxes.
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Ahead of the 2024 campaign, The Sports Geek (TSG) analyzed what every NFL player earning $1 million for the year would bring home after the government claimed its share. Based on those projections, we can put together a rough estimate of what Prescott’s bank account will look like.
According to the media outlet, NFL players are subject to five taxes:
- Federal Income Tax
- State Income Tax
- Local Municipal Tax
- Federal Insurance Contributions Act (FICA)
- Jock Tax (explained here)
The United States’ effective federal tax rate is approximately 32.5%, meaning they yank out a shade more than $325,000 for every $1 million a player makes. That’s a massive chunk for any player and an even larger one for Prescott.
The QB’s federal income tax bill comes down to approximately $19.5 million, which is equivalent to Baltimore Ravens All-Pro cornerback Marlon Humphrey’s whole salary!
Fortunately for Prescott, the Cowboys are located in Texas, which has no state income or local municipal tax. But he does still have to shell out money for FICA ($31,362 per $1 million) and the Jock Tax ($5,459.40 per $1 million for Dallas players in 2024). This results in the following tax and “take-home” totals:
- Federal Income Tax – $19,512,480
- State Income Tax – $0
- Local Municipal Tax – $0
- FICA – $1,897,920
- Jock Tax – $5,459.40
- Total Taxes – $21,415,859.40
- Take Home Salary – $38,584,140.60
While the tax bill is already significant, Prescott would have to pay even more if he played in states like Arizona, and the most if he played for the Los Angeles Rams.
Prescott has huge cap hits on this contract
If the Cowboys had extended Prescott sooner, they would have created a good amount of cap space for the 2024 season. This is the main reason they have been much-maligned for unnecessarily dragging out the process.
Moving forward, Dallas will have to do a lot of maneuvering if they want to make moves in free agency. From 2025 to 2028, Prescott’s cap hits are all greater than $62 million:
- 2025 – $89,882,647
- 2026 – $68,005,000
- 2027 – $62,000,000
- 2028 – $72,000,000
Those massive numbers coincide with cap hits above $30 million for wide receiver CeeDee Lamb across the next three years. Beyond them, Dallas also needs to extend defensive superstar Micah Parsons. The cap continues to rise each year, but the Cowboys could have nearly $130 million of their cap tied up in just three players once they sign Parsons to a new and lucrative deal.
Cowboys fans aren’t content with regular season wins: they want to bring an end to their three-decade Super Bowl drought. For that to happen, they need Prescott to perform in the playoffs. So far, he has struggled to do so consistently, even when Dallas had cap space. How will he fare when he’s forced to shoulder an even larger share of their hopes?
If he can’t rise to the occasion, the Cowboys’ dry spell will live on. He has to find a way to at least get them to the NFC Championship game in the next couple of seasons. Otherwise, he’ll forever be remembered more for his postseason failures than anything else.
