Go to the Olympics representing the United States and win a Gold, Silver, or Bronze?
Well…There’s a tax for that.
She has flipped, tumbled and leapt her way into the hearts of millions over the course of the Olympic games. But when Simone Biles returns home she will be in for not just a major celebration but also a hefty tax bill.
The 19-year-old has won five Olympic medals – four gold and one bronze. She has cemented her title as the world’s best gymnast by taking home the gold in the all-around after three successive world championship titles – a feat only accomplished by three others in history.
But all that winning will cost her. On 21 August, Biles could be slapped with a tax bill close to $43,560 (£33,479)
That estimate is based on the $2m that she has accumulated in endorsement deals and assuming she is charged in the highest income tax bracket in the US – 39.6%.
Biles is not alone, her fellow US medallists will be slapped with tax bills for their victories as well.
American Olympians are subject to a so-called “victory tax” – a tax on both the money they receive from the Olympic committee for winning and on the value of the Olympic medal.
What are they taxed on?
US athletes who win a medal at the Rio games will take home the hardware and a cash bonus from the US Olympic Committee.
Gold medallists will receive $25,000, silver medallists get $15,000, and bronze winners earn $10,000.
Those winnings are taxed as income, the same way Americans are taxed on other prize money, like lottery winnings. Most countries exempt their athletes from these taxes.
But there’s more, the medals are also given a value and taxed. The value is based on the value of the materials the medals are made of.
Gold medals – which are mostly made of silver with a gold plating – are worth roughly $600 based on current commodity prices, silver medals are worth close to $300, bronze medals – which consist mostly of copper – have barely any monetary value, approximately $4.
How much is the tax?
Assuming the athlete was already a high-income earner, paying the top bracket of US taxes, they would be paying 39.6% on the combined value of the medal and cash payout.
Americans for Tax Reform calculated the bills to be: for a gold medallist $9,900, for silver $5,940, and for bronze $3,960.
That’s also assuming the athlete only won one medal.