You see LeBron James dunking on SportsCenter and assume his $52.6 million Lakers contract means he’s swimming in cash. But what if we told you taxes and NBA rules could slash that paycheck harder than a playoff double-team? A viral claim suggests America’s tax system might be the real MVP of salary deductions. For California-based superstars, that max contract might feel like minimum wage after the government takes its cut.
The buzz started when The Makeshift Project on Instagram broke down NBA salaries post-deductions. Their hosts gasped at the math: “Lebron James… walks home with $15 million. That’s crazy talk.” They clarified this was “strictly off his salary” before endorsements. Suddenly, everyone wondered: Could America’s tax code really steal 70% of King James’ throne?
Using a ClutchPoints salary breakdown, the hosts turned their attention to LeBron James, who is set to earn $52.6 million this season. One of them predicted he would take home “$20 million” before being corrected by the other, who revealed, “$15 million. That’s crazy talk. Now, this isn’t including his endorsements and everything. This is strictly off his salary.” The reaction was instant disbelief, with the host adding, “Yeah, thinking about LeBron James actually only making $15 million a year is crazy.”
The numbers behind that claim check out when you crunch them. Federal income tax at 37% takes roughly $19.5 million straight off the top. Playing in California means another $7 million gone to state tax- the highest rate in the nation. Then comes the NBA’s escrow system, which this year hit harder than usual, costing him around $4.8 million net. Agent fees likely take another $2 million, with Medicare, FICA, and the so-called “jock tax” from playing games in other states adding another $2.8 million in combined hits.
Add it all up, and LeBron’s take-home ends up just over $16 million. Right in line with the viral $15 million figure when accounting for slight variations in calculations.
The reality here is that the number on paper and the number in the bank are two very different things. And while $15 million is still an enormous sum, it is barely 28.5% of his gross salary. For LeBron, that is just his Lakers paycheck– the endorsements and business ventures still rake in tens of millions more. But as far as his 2025-26 salary goes, the viral post isn’t exaggerating much. It is a rare peek behind the curtain at how America’s tax structure, California’s steep rates, and league-specific systems collide to shrink even the biggest paychecks in sports. Next, we take a closer look at one of those unique systems that takes a chunk before players even see their money- Escrow..
The Escrow heist: NBA’s hidden 10% tax
Before LeBron even sees his paycheck, the NBA snatches 10% ($5.26M) into an escrow fund. This isn’t some savings account. It’s insurance for owners to guarantee players never exceed 51% of league revenues. If teams earn less than projected? That money vanishes. Last season, players lost 91% of escrow funds, a record $480 million giveaway to owners.
Nov 15, 2024; San Antonio, Texas, USA; Los Angeles Lakers forward LeBron James (23) during the second half against the San Antonio Spurs at Frost Bank Center. Mandatory Credit: Scott Wachter-Imagn Images
Why does this hurt so much? Escrow gets deducted BEFORE taxes. So LeBron pays federal and California taxes on his full $52.6M salary. Even though $5.26M never reached him. It’s like tipping a waiter on food you didn’t eat. Financial experts call it “double taxation by design,” with escrow making California’s high taxes even more brutal.
The system rarely benefits players. Since 2020, escrow returns averaged just 22%- meaning 78% of withheld cash stays with owners. For LeBron, that’s another $4M+ gone annually before Nike or Sprite endorsements soften the blow.
The post Fact Check: Is LeBron James Only Making $15M With Lakers This Season? appeared first on EssentiallySports.
