Shohei Ohtani’s Salary: Inside the $700 Million Contract, the Deferrals and the Tax Bill
Shohei Ohtani signed the largest contract in the history of North American professional sports, and it pays him less per year than most middle relievers make. That is not a mistake — it is the entire design, and it is the most interesting thing about the deal.
Table of Contents
Key Takeaways
- Ohtani’s contract with the Los Angeles Dodgers is worth $700 million over 10 years, but $680 million of it — about 97% — is deferred until after the deal ends.
- He earns $2 million per year from 2024 through 2033, then $68 million per year from 2034 through 2043.
- For luxury tax purposes the deal counts as roughly $46.1 million per year, not $70 million, because deferred money is discounted to present value.
- Endorsements pay him far more than baseball does: about $125.6 million a year from 20-plus companies, putting his 2026 total income near $127.6 million.
- California officials estimate the deferral structure could cost the state around $98 million in tax revenue, and some lawmakers want Congress to cap the practice.
The $700 Million Contract, and Why Ohtani Only Sees $2 Million a Year
Ohtani agreed to terms with the Dodgers on Dec. 9, 2023. The number — 10 years, $700 million — was the largest in North American sports history by a wide margin.
The structure was stranger than the total. About 97% of the deal, $680 million, is deferred. From 2024 through 2033, the decade he is actually playing, Ohtani collects $2 million a year. The remaining $680 million is paid out from 2034 through 2043, at $68 million annually, long after the contract has expired.
The deferral was Ohtani’s idea, not the club’s. Pushing the money out reduces the Dodgers’ luxury tax exposure — MLB’s competitive balance tax charges clubs a penalty on payroll above a set threshold — which frees the front office to spend on other players. In effect, he traded present-day cash for a better roster around him, and the decision was received as close to unprecedented.
How AAV Works, and Why Ohtani’s Is $46 Million, Not $70 Million
MLB compares contracts using average annual value: total dollars divided by years. By that arithmetic Ohtani’s AAV would be $70 million.
Deferred money does not count at face value, though. Because a dollar paid in 2043 is worth less than a dollar paid today, the league discounts deferred salary to present value using the federal mid-term rate. Applying the 2023 rate of 4.43% brings Ohtani’s luxury tax AAV down to roughly $46.1 million.
That $24 million gap per year, across 10 years, is the payroll room the Dodgers bought.
What $2 Million a Year Actually Looks Like
Broken down, his current salary comes to about $38,500 a week, or roughly $5,500 a day.
The back half is a different universe. Starting in 2034, $68 million a year works out to about $1.31 million a week — roughly $186,000 a day, every day, for a decade, to a man who will have long since stopped playing.
Endorsements Dwarf the Salary
The salary is close to irrelevant to Ohtani’s actual income. He holds endorsement deals with more than 20 companies, most of them Japanese, reportedly worth about $125.6 million a year. The roster includes New Balance, Seiko, Kose, Japan Airlines, Porsche, Kowa, Fanatics, Mizuno, Lotte and Suntory’s Boss coffee brand.
Clearing $100 million in off-field income is exceptionally rare. Tiger Woods, Roger Federer and Stephen Curry are roughly the whole list of athletes who have reached that level. Add the $2 million salary, and Ohtani’s estimated 2026 income lands near $127.6 million — with about 98% of it coming from outside baseball.
How Much Ohtani Pays in Taxes
Players in the US owe both federal and state tax, and Ohtani plays for a team based in the highest-tax state in the country.
The components: 37% federal income tax at the top marginal rate, 13.3% California state tax — the highest in the nation — plus 2.35% Medicare and 1.1% California state disability insurance. Together that comes to about 53.75%.
More than half of every dollar goes to tax.
One caveat worth stating plainly: the figures below apply that 53.75% rate flat to all income, which is how the estimate is usually presented in summary form. Actual liability differs — marginal brackets mean not every dollar is taxed at the top rate, and the SDI component is capped. Treat these as rough magnitudes, not filings.
What He Actually Took Home in 2025
On a $2 million salary, a 53.75% rate produces about $1.075 million in tax and roughly $925,000 net.
For scale: had Ohtani taken the money as a conventional $70 million per year, his annual tax bill would have been somewhere near $37.6 million — about 19 times what he currently earns before tax.
The Tax Bill on the Deferred Years
From 2034, assuming he is still a California resident when the payments arrive, $68 million a year at the same rate would mean roughly $36.6 million in tax and about $31.5 million net.
Across the full $700 million, that math implies roughly $376 million in tax and about $324 million kept.
Whether California actually collects its share of that is the subject of the final section of this article — and it is genuinely unsettled.
The Jock Tax
MLB players also owe tax in states where they play road games, a system known as the jock tax. Income earned during a series in New York is taxed at New York rates; states without income tax, like Florida and Texas, collect nothing.
The result is an effective rate that shifts with the schedule, and a filing burden complex enough that nearly every player hands it to a specialist.
Ohtani’s Salary History, From Japan to the Dodgers
| Year | Team | Salary (est.) | Notes |
|---|---|---|---|
| 2013 | Hokkaido Nippon-Ham Fighters | ¥15 million (about $150,000) | Signed for a ¥100 million bonus plus ¥50 million in incentives |
| 2014 | Hokkaido Nippon-Ham Fighters | ¥30 million (about $280,000) | First 10-win, 10-homer season |
| 2015 | Hokkaido Nippon-Ham Fighters | ¥100 million (about $830,000) | Pitching Triple Crown |
| 2016 | Hokkaido Nippon-Ham Fighters | ¥200 million (about $1.8 million) | Pacific League MVP, Japan Series title |
| 2017 | Hokkaido Nippon-Ham Fighters | ¥270 million (about $2.4 million) | Announced his move to MLB |
| 2018 | Los Angeles Angels | $545,000 | Signing bonus of about $2.315 million |
| 2019 | Los Angeles Angels | $655,000 | Rehabbing from elbow surgery |
| 2020 | Los Angeles Angels | $259,000 | 37% of $700,000 in the pandemic-shortened season |
| 2021 | Los Angeles Angels | $3 million | First MVP |
| 2022 | Los Angeles Angels | $5.5 million | Qualified as both pitcher and hitter |
| 2023 | Los Angeles Angels | $30 million | Second MVP |
| 2024 | Los Angeles Dodgers | $2 million | 50-50 season, third MVP |
| 2025 | Los Angeles Dodgers | $2 million | Returned to the mound, fourth MVP |
| 2026 | Los Angeles Dodgers | $2 million | Full two-way workload |
The Nippon-Ham Years (2013–2017)
The Fighters, of Nippon Professional Baseball’s Pacific League, drafted Ohtani in the first round in 2012 and signed him for a ¥100 million bonus plus ¥50 million in incentives, with a first-year salary of ¥15 million.
The raises came fast. His pitching Triple Crown in 2015 pushed him to ¥100 million, the threshold that functions in Japan as a marker of star status. MVP in 2016 doubled it to ¥200 million. By the winter of 2017, as he prepared to leave for MLB, he was at ¥270 million — 18 times his rookie salary in five years.
The Angels Years (2018–2023)
Ohtani came to MLB in November 2017 through the posting system, the mechanism that lets NPB clubs make a player available to major league teams in exchange for a release fee.
He arrived at 23, and that number cost him a fortune. Under MLB’s collective bargaining agreement, players signing from abroad before age 25 are treated as international amateurs, meaning a club can only pay them out of its limited international bonus pool. Ohtani’s signing bonus with the Angels was about $2.315 million. Had he waited two more years, he could have signed a free-agent deal worth hundreds of millions.
His salary started near the league minimum — $545,000 in 2018, a steep pay cut from Japan — and stayed there through the injury years. The 2021 MVP moved him to $3 million, then $5.5 million, and by 2023 he was earning $30 million, his last season before the Dodgers deal.
MLB’s 10 Highest-Paid Players in 2026
Rankings use AAV: total contract value divided by years.
| Rank | Player | Team | Contract | AAV |
|---|---|---|---|---|
| 1 | Shohei Ohtani | Dodgers | 10 years, $700M | $70 million |
| 2 | Kyle Tucker | Dodgers | 4 years, $240M | $60 million |
| 3 | Juan Soto | Mets | 15 years, $765M | $51 million |
| T4 | Zack Wheeler | Phillies | 3 years, $126M | $42 million |
| T4 | Bo Bichette | Mets | 3 years, $126M | $42 million |
| 6 | Aaron Judge | Yankees | 9 years, $360M | $40 million |
| 7 | Framber Valdez | Tigers | 3 years, $115M | $38.33 million |
| 8 | Jacob deGrom | Rangers | 5 years, $185M | $37 million |
| 9 | Blake Snell | Dodgers | 5 years, $182M | $36.4 million |
| 10 | Gerrit Cole | Yankees | 9 years, $324M | $36 million |
Note: AAV here is simple total-divided-by-term. Ohtani’s luxury tax AAV, which accounts for his deferrals, is about $46.1 million.
Ohtani Leads by a Wide Margin
His $70 million AAV clears second place by $10 million. The asterisk is the one running through this entire article: his actual paycheck is $2 million. No player has ever had a larger gap between contractual value and money received.
Where the Other Japanese Players Rank
Yoshinobu Yamamoto, Ohtani’s Dodgers teammate and rotation-mate, carries an AAV of about $27.08 million on a deal that remains the largest total guarantee ever given to a pitcher.
Shota Imanaga, the Cubs left-hander, is at about $22.025 million. Yusei Kikuchi, now with the Angels, is at about $21 million.
Why Salaries Keep Climbing
Multiple players cleared $50 million in AAV during the 2020s, a threshold that did not exist before. Broadcast rights money is the main engine, along with the sport’s expansion into global markets — Asia in particular.
The Dodgers make the case concretely. After signing Ohtani, the club added 12 new Japanese corporate sponsors and reportedly generated about $70 million in additional revenue. His AAV, on paper, is $70 million.
The 10 Highest-Paid Athletes in the World in 2026
Forbes publishes its annual list each May. The 2026 edition was released May 22.
| Rank | Athlete | Sport | Earnings (est.) |
|---|---|---|---|
| 1 | Cristiano Ronaldo | Soccer | $300 million |
| 2 | Canelo Alvarez | Boxing | $170 million |
| 3 | Lionel Messi | Soccer | $140 million |
| 4 | LeBron James | Basketball | $137.8 million |
| 5 | Shohei Ohtani | Baseball | $127.6 million |
| 6 | Stephen Curry | Basketball | $124.7 million |
| 7 | Jon Rahm | Golf | $107 million |
| 8 | Karim Benzema | Soccer | $104 million |
| 9 | Kevin Durant | Basketball | $103.8 million |
| 10 | Lewis Hamilton | Formula One | $100 million |
The Only Asian Athlete on the List
Ohtani ranks fifth at an estimated $127.6 million, the only Japanese or Asian athlete in the top 10.
The composition of that figure is what stands out. His playing salary is $2 million. Essentially his entire ranking is built on the $125.6 million in endorsements — he is on this list almost entirely on the strength of who he is off the field.
The Saudi Effect
Saudi money continues to shape the top of the list. Ronaldo at No. 1 and Benzema at No. 8 both play for Saudi Pro League clubs at salaries no other league would match.
Ohtani and Curry are the notable exceptions — top-five earners with no Gulf state involvement in their income at all.
Baseball’s Lone Representative
Ohtani is the only baseball player in the 2026 top 10. The 2025 edition had two: Ohtani at ninth and Juan Soto at seventh.
Ohtani’s move from ninth to fifth in a single year, without a raise, reflects a marketing position that spans two countries at once — and there is little sign of it slowing.
California’s Problem With Ohtani’s Deferrals
The structure that helped the Dodgers build a champion also opened a tax question the state of California would rather not have.
Why the State Could Lose $98 Million
Under US tax law, deferred compensation is generally taxed based on where the recipient lives when the money is actually paid — not where they lived when they earned it.
Ohtani’s deferred payments arrive between 2034 and 2043. If he has relocated by then to a state with no income tax, such as Nevada, Texas or Florida, or moved outside the country entirely, California would likely be unable to tax any of that $680 million.
At a top rate of 13.3%, the state’s potential loss has been estimated at around $98 million.
Lawmakers Push for a Cap
California State Controller Malia Cohen and state Sen. Josh Becker have both raised the issue publicly, arguing that unlimited deferral lets the highest earners sidestep the tax burden other residents cannot avoid.
A resolution urging Congress to impose a reasonable cap on deferred compensation for high earners was introduced in the state legislature and advanced through committee. The argument is straightforward: close the loophole to protect the revenue base and keep the burden equitable.
The Deal Is Legal — That’s the Point
None of this suggests wrongdoing. Ohtani’s contract complies fully with MLB’s collective bargaining agreement, and deferring salary is a right the agreement explicitly grants players. Nothing about the deal is a workaround.
What made it a policy question is scale. A structure that had existed quietly for decades, moving modest sums, was suddenly moving $680 million — enough to register on a state budget. The legal debate over whether deferrals of this size should remain unlimited is still open.
