Wait, are footballers PAYE? 🤯

Camaraderie, that’s what sports are all about, right? And as much as we’d like to talk about that heartwarming topic all day, we’re tax experts, so it’s only right we talk about cold, hard tax… stuff. One question that always crosses our mind as *insert famous footballer here* scores yet again is do footballers pay tax? Better yet, are footballers PAYE?

You must be DYING to know the answer. So let’s delve into what we know!

What is PAYE?

PAYE stands for pay as you earn. It’s the system employees pay taxes through. The two main taxes you pay through PAYE are Income Tax and National Insurance contributions. And before you ask, yes – they’re compulsory taxes. 

You’re PAYE if a company employs you and sends you a payslip every month. This means you’re on a specific tax code and paying tax based on how much income you make. 

Are footballers PAYE?

Yep, they are.

The club you play for employs you. You have written contracts drawn up, just like at any other regular employee job.

You’re paid through PAYE, with Income Tax and NI automatically deducted. This leaves almost no room for any foul play (get it?). 

Do HMRC know how much I make?

HMRC are aware of all the income you’re making playing football, and taxing you accordingly. As many footballers are PAYE high earners and earn (way) more than £150,000 per year, you’re in the highest tax bracket. This means you pay 45% Income Tax on any earnings above this amount.

Remember, you only pay the higher tax rates once you pass each of the thresholds, shown in the table below.

So footballers do pay tax?

All football players who are under contract with a club are considered employed. You therefore pay tax through your club, straight to HMRC.

Tax is deducted before you even receive your salary each month, just like when you work an office job. 

But – plot twist – you’re only PAYE for the income you earn through your football club payments. 

What if I’m on the bench?

Good question. Simple answer – it doesn’t matter.

Whether you’re on the field or on the bench, either as a sub or injured, you get the same pay. It is on a person-by-person basis though, so your contract could say that you only get paid when you play. But most don’t. 

Of course, you don’t get any bonuses for goals, wins, etc. if you’re not on the field. 

What about image rights?

What are image rights? Basically, it’s your image – your name, nickname, kit number, likeness, photographs, autographs, initials and lots, lots more. 

In layman’s terms, anything that is used by companies relating to you as a footballer by way of endorsement deals etc. is paid to the imaging rights company directly. 

Image rights are a big part of a footballer’s income stream. Currently, image rights are only taxed at 19% corporation tax (instead of the 45% rate of Income Tax). Therefore, they’re a tax-efficient way to make money. HMRC are accepting of properly structured image right contracts, however can sometimes decide that certain profits are subject to Income Tax as opposed to corporation tax.

What about other ads, sponsorships, or endorsements?

Now, this income is considered self-employed income. Although you could be representing the club or town you play for, you don’t report this income through PAYE. So, all you self-employed folks reading this, we know you’re screaming at your laptops and phones, “Red card!! You need to report your untaxed income to HMRC!!”. You do. 

Although, there’s no way to find out if you are. Hopefully you follow the rules off the field, because we know that on the field things can get a little… heated. 

Footballers usually have several streams of income. It’s not all declared to HMRC. Especially if it’s not part of your salary. Therefore, you have to file a Self Assessment to declare your untaxed income to HMRC.