Newark, Arkansas → Los Angeles. Undrafted in 2021 → $185M max contract in 2026. After California's 13.3% income tax and federal at 37%, here's what he actually keeps.
$41.25M Year 1 · California 13.3% · ~$19.6M Take-HomeOn June 24, 2026, Austin Reaves agreed to a 4-year, $185 million maximum contract with the Los Angeles Lakers — the largest deal in NBA history for a player who was never drafted. Five years earlier, he couldn't get a single team to select him on draft night. He signed with the Lakers as an undrafted free agent for the minimum, earned a two-way contract, and worked his way into one of LeBron James' most trusted co-stars.
The contract includes a player option in Year 4 (2029-30), meaning Reaves can opt out and re-enter free agency at 31 years old if his market value continues to grow. His salary escalates each year: ~$41.25M, ~$44.5M, ~$47.8M, and ~$51.1M.
The catch: he plays for the LA Lakers — in California, which charges 13.3% income tax on earnings above $1 million. Combined with federal taxes at 37%, Reaves keeps roughly 47.5 cents on every dollar.
California's 13.3% top rate applies to all income above $1 million — and Reaves earns $41.25 million. Here's exactly where Year 1 goes.
| NBA salary (Year 1) | $41,250,000 |
| Federal income tax (37% bracket, ~36.9% effective) | −$15,230,000 |
| California income tax (13.3% top rate) | −$5,400,000 |
| Medicare tax (1.45% + 0.9% above $200K) | −$967,000 |
| Social Security (6.2% up to $184,500) | −$11,000 |
| Estimated Year 1 take-home | ~$19,642,000 |
Reaves' salary escalates each year. Here's the estimated take-home across all four seasons.
| Season | Gross Salary | Federal | California | FICA | Take-Home |
|---|---|---|---|---|---|
| 2026-27 (Year 1) | $41.25M | $15.23M | $5.40M | $978K | ~$19.64M |
| 2027-28 (Year 2) | $44.50M | $16.43M | $5.83M | $1.05M | ~$21.19M |
| 2028-29 (Year 3) | $47.80M | $17.65M | $6.26M | $1.13M | ~$22.76M |
| 2029-30 (Year 4 — player option) | $51.10M | $18.87M | $6.69M | $1.20M | ~$24.34M |
| 4-Year Total | $184.65M | $68.18M | $24.18M | $4.36M | ~$87.93M |
Estimates based on current federal and California tax rates. FICA includes Medicare (1.45% + 0.9% surcharge) and Social Security (capped at $184,500). Individual tax situation will vary.
Like all NBA players, Reaves doesn't just pay California taxes. He pays income tax in every state where the Lakers play road games.
The formula: Games in state ÷ total duty days × annual salary × state tax rate = tax owed to that state.
The LA advantage: Because Reaves already pays California's 13.3% — the highest rate in the NBA — most other states provide a credit for California taxes paid. States with lower rates than California effectively cost Reaves nothing extra. Only New York (10.9% + NYC 3.9%) could generate additional jock tax exposure above the CA rate.
Net effect: Unlike players in low-tax states who face significant jock tax exposure in California road games, Reaves already pays the top rate at home — making his road-game tax exposure relatively limited compared to peers playing in Texas or Florida.
The Spurs, Mavericks, or Rockets could hypothetically have offered the same $185M. Texas has zero state income tax. The difference over 4 years is substantial.
4-year take-home after federal + CA + FICA on $185M total contract
Same $185M deal, no state income tax — only federal + FICA apply
California's 13.3% costs Reaves roughly $24 million over his contract compared to playing in a no-income-tax state. For an undrafted player from a town of 1,100 people, every dollar of that gap represents a remarkable story.
On his $41.25M Year 1 salary, Reaves' estimated take-home is approximately $19.64 million after federal tax (~$15.23M), California tax (~$5.4M), and Medicare (~$978K). Over the full 4-year, $185M deal, his estimated after-tax total is approximately $87.9 million.
A 4-year, $185 million maximum contract with the Lakers signed June 24, 2026 — the largest deal in NBA history for an undrafted player. Salaries escalate from ~$41.25M to ~$51.1M, with a player option in Year 4.
California's 13.3% top rate applies on income above $1M. On $41.25M, Reaves owes approximately $5.4M to California in Year 1. Over 4 years, California collects an estimated $24.2M from his contract — more than most Americans earn in a lifetime.
Yes. Not a single NBA team selected Reaves in the 2021 draft. He signed with the Lakers as an undrafted free agent and earned every dollar of his $185M deal on merit — making it one of the most remarkable compensation arcs in NBA history.
Reaves was born and raised in Newark, Arkansas — population ~1,100. He played college ball at the University of Arkansas. His journey from small-town Arkansas to LA Lakers max contract in 5 seasons is essentially without precedent.
Over the full 4-year deal, Reaves would keep approximately $24.2M more in Texas (no income tax) vs. California (13.3%). Year 1 alone, the difference is ~$5.4M — the full California tax bill he'd avoid.
Less than most. Because Reaves already pays California's 13.3% — the highest NBA rate — most other states provide a credit for CA taxes paid. Only New York City (combined ~14.8%) generates meaningful additional jock tax exposure above his home rate.
Approximately $87.9 million after federal, California, and Medicare taxes on the full $185M contract — assuming current tax rates and California residency throughout.
13.3% hits everyone earning over $1M in California. Use our calculator to see the full picture for any income level.
Calculate California Take-Home →Salary figures based on publicly reported contract details. Tax estimates are illustrative and based on 2026 federal and California tax rates. Individual tax situations vary. Not financial or legal advice.