The luxury tax threshold will be lowered for next season.
Instead of the taxable cap being 140% of the league average salary, it will now be 115% of the league average.
The tax rate itself will remain at 40%.
What this means:
1. The 30 payrolls are averaged out over the season (not at any particular point)
2. The AVERAGE payroll is the basis for the tax.
3. Any team that has 115% payroll OVER the average will have that amount subject to tax (40%)
Example.
Say the League Average Payroll is 100 million
Royals run a 125 million payroll next year
115% of 100 million is 115 million.
Taking 125 minus the 115, that means 10 million would be subject to luxury tax.
10 million x 40% = 4 million in luxury tax due at the end of the year to the revenue sharing pool.
ALL of the taxes are combined into one pool and EVENLY distributed to the bottom 15 teams.
THIS CHANGE IS BEING MADE TO HELP THE LOWER MARKET TEAMS. It is inherently unfair for a team to have a 50 million salary and expect to compete against a 125 million salary. This doesn't do much to fix the issue (it happens in real life as well) but it does throw a bone to the small market teams, when every dollar counts twice as much.
Nick - I need you to implement the change in the software for next sim. League Options / Financials / 140 threshold to 115 (make sure to hit enter to save it).
Cory
Instead of the taxable cap being 140% of the league average salary, it will now be 115% of the league average.
The tax rate itself will remain at 40%.
What this means:
1. The 30 payrolls are averaged out over the season (not at any particular point)
2. The AVERAGE payroll is the basis for the tax.
3. Any team that has 115% payroll OVER the average will have that amount subject to tax (40%)
Example.
Say the League Average Payroll is 100 million
Royals run a 125 million payroll next year
115% of 100 million is 115 million.
Taking 125 minus the 115, that means 10 million would be subject to luxury tax.
10 million x 40% = 4 million in luxury tax due at the end of the year to the revenue sharing pool.
ALL of the taxes are combined into one pool and EVENLY distributed to the bottom 15 teams.
THIS CHANGE IS BEING MADE TO HELP THE LOWER MARKET TEAMS. It is inherently unfair for a team to have a 50 million salary and expect to compete against a 125 million salary. This doesn't do much to fix the issue (it happens in real life as well) but it does throw a bone to the small market teams, when every dollar counts twice as much.
Nick - I need you to implement the change in the software for next sim. League Options / Financials / 140 threshold to 115 (make sure to hit enter to save it).
Cory
Haha just kidding.
