Leafs take a page from CFL playbook for Auston Matthews extension

The Toronto Maple Leafs and star centre Auston Matthews took a page out of the CFL’s playbook when finalizing his five-year $58.15 million dollar extension.

Import CFL players have been taking advantage of the extra savings for years by negotiating more money on signing bonuses instead of base salary.

American players pay income tax in Canada but a provision in the Canada-U.S. income tax treaty allows international players who maintain a permanent residence south of the border to be taxed just 15 per cent on bonuses – much less than their usual Canadian tax rate.

The other big benefit to players is that they have more upfront money – no small consideration in a league with non-guaranteed contracts. It does add an element of risk for the team: all bonus money counts towards the cap so if a player is released at a later date, the savings is less significant.

The last couple of off-seasons have seen a number of CFL teams ask their highly-paid players to restructure their contracts to include a larger signing bonus but a lower overall value, an arrangement that provides the team with cap savings and the player with similar compensation when the tax implications are factored in.

Canadian players, of course, do not enjoy these benefits which is why they are less likely to restructure their deals for purely salary cap reasons.

Unlike football contracts, Matthews’ deal is fully guaranteed so he’ll get all of the money – and keep more of it in his pocket thanks to a CFL play.

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