Zion Williamson's NBA salary after tax hit

Basketball phenom Zion Williamson – the first overall pick in this year’s NBA draft – is headed to New Orleans after being picked up by the Pelicans.

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Williamson obtained a lucrative contract for a rookie, who are paid on a sliding scale determined by their draft position and the league's salary cap.

First-round picks, for example, have a set amount they can make per season. But their contracts can yield them 80 percent to 120 percent of that scale amount.

Williamson secured a guaranteed two-year contract worth about $19,977,120, which is 120 percent of the base value.

Teams can also exercise options to extend the contract through a third and fourth season, but that money is not guaranteed.

With the addition of the team option for two extra seasons, Williamson's earnings would be closer to $44.2 million.

However, like all players, Williamson will lose a chunk of his NBA earnings to taxes.

He will be subject to the highest federal rate, which is 37 percent, as well as state and local taxes.

Based on his two-year guaranteed earnings only, here’s what Williamson’s tax obligations will look like, according to data provided to FOX Business by Robert Raiola, director of the sports and entertainment group at PKF O'Connor Davies.

  • Gross Wages: $19,977,120
  • Federal taxes (including Medicare, Social Security & additional Medicare tax): $7,871,197
  • State and Local Taxes: $1,198,627
  • Net Wages: $10,907,296

(*Calculations assume Louisiana residency)

Williamson will also owe “jock taxes,” which athletes pay to states where they play and earn income. These taxes are usually calculated by dividing the number of work days spent (practices and games) in the city by the total number of work days. It's not a double tax, however. Players pay taxes equal to the highest rate in either their resident or non-resident state. They get credit for the taxes in the lower-tax state.

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As previously reported by FOX Business, Williamson’s big money-making opportunities likely lie in endorsements. He could potentially land a massive endorsement deal with a sneaker brand worth $100 million.

Williamson played for Duke, where he averaged more than 22 points per game during his freshman season. His playing abilities have earned him comparisons to the likes of Anthony Davis and LeBron James.