What a PGA Tour Player Nets

Breaking down estimated taxes and expenses from tournament earnings.

Apr 18, 2022

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Hey Golfers —

After last week's newsletter, a handful of readers sent me messages asking how much a PGA Tour win is really worth.

Intrigued by this, I researched estimated taxes, caddie fees, support team fees, and travel expenses.

Let’s get to it.

Because players on the PGA Tour are independent contractors, most players will set up an LLC. The benefit of forming an LLC is primarily for tax reasons. Players will run their earnings, equipment contracts, endorsement money, and expenses through the LLC and then pay any employees or contractors from the LLC.

Here is a quick breakdown of relevant information:

A player files a state income tax form for each state they win money in
A player files a state income tax form in their residing state — for all earnings
A player must file a federal income tax form — likely 37% tax bracket
Weekly caddie fee of around $2,000
7% of player earnings to the caddie — A win is worth 10% to the caddie

To begin, the sample data I am using from a player standpoint is the Top 50 players in FedEx Cup points as of April 17th, 2022.

Of the Top 50 players in FedEx Cup points, 42 claim residence in the United States. Keep in mind — that this information is pulled from the PGA Tour player’s bio.

Here are the most lived places by PGA Tour players currently in the Top 50 in FedEx Cup points:

Florida — 11
Georgia — 6
Arizona — 4
Texas — 4
Nevada — 3
Oklahoma — 3

Taxes

A breakdown of the state income tax brackets:

Florida — 0%
Georgia — 5.75%
Arizona — 4.5%
Texas — 0%
Nevada — 0%
Oklahoma — 5%

There are 48 PGA Tour events this season. Interestingly, 27% of the events are played in states with no income tax, benefiting players, especially if they live in states requiring no state income tax. Below are the states with no income tax and how many times the state hosts an event.

Tennessee — 1
Nevada — 2
Texas — 5
Florida — 5

Caddie

PGA Tour player and caddie arrangements are not exact for every relationship. I spoke to a PGA Tour caddie over the weekend, which confirmed a general range of what caddies might make during a given week.

$2,000 base fee
7% of player earnings
10% of player earnings if their player wins

Support Team

Support team fees are wide-ranging depending on the player. Who would be considered a part of the support team?

Swing coach
Short game coach
Putting coach
Psychologist

Not all PGA Tour players will have their support team arranged the same way, but it can point us in the right direction of an estimation. A fantastic YouTube video breaks this down on the Golf Insider channel. The video estimates that 7% of a player’s on-course earnings go to the support team.

Travel

Travel expenses vary greatly depending on the PGA Tour players. There are two major buckets for travel expenses.

Transportation
Lodging

A round trip flight from Dallas To Hilton Head costs around $40,000 on a private plane — this price ranges significantly based on the type of plane. A King Air will cost around $30,000, while a Gulfstream will cost approximately $60,000.

A round trip flight from Dallas to Hilton Head costs around $450 on a commercial airline.

A 3 bedroom condo on Hilton Head island costs around $5,000 for the week. A mid-tier hotel room will cost around $2,000 for the week at Hilton Head during a PGA Tour event.

Let’s use Jordan Spieth’s win at the RBC Heritage as a quick example.

He won $1,440,000.

Federal income tax (37%): $532,800
South Carolina state income tax (7%): $100,800
Texas state income tax (0%): $0
Caddie base fee: $2,000
Caddie win percentage (10%): $144,000
Support team percentage (7%): $100,800
Travel: $50,000
Net: $509,600

Let’s use Joel Dahmen’s T12 at the RBC Heritage as a quick example.

He won $140,666.

Federal income tax (37%): $52,046
South Carolina state income tax (7%): $9,846
Arizona state income tax (4.5%): $6,329
Caddie base fee: $2,000
Caddie earning percentage (7%): $9,846
Support team percentage (7%): $9,846
Travel: $5,000
Net: $45,753

A few comments.

If a player has an LLC — the estimated taxes and expenses may not be the exact percentage breakdown provided above, as there will likely be offsets in some areas.

Travel is a wildcard; a player could have a sponsorship with a private plane organization, significantly reducing travel costs. Support team costs are generally unknown and vary based on the player.

While these two examples are just estimates — it is a safe assumption that players will net significantly less than their earnings from a given tournament.

Have yourself a great Monday. Talk to you next week!

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