The Los Angeles Dodgers set a historic record with their luxury tax, paying nearly $170 million as the cost of defending their title.

Following their back-to-back World Series victories, the Dodgers are set to pay a record-breaking luxury tax of $169.4 million (around 12.13 billion RMB), pushing their cumulative tax over the last two years to $272.4 million (approximately 19.49 billion RMB).

According to data obtained by the Associated Press and confirmed by MLB and the players’ union, the New York Mets, despite missing the playoffs this season, still owe $91.6 million (about 6.56 billion RMB) in taxes. Under owner Steve Cohen’s heavy investment, the Mets’ total tax payments over the past four years have risen to $320.3 million (roughly 22.93 billion RMB).

The Dodgers will pay the luxury tax for the fifth consecutive season, with this year’s amount breaking their own previous record of $103 million (approximately 7.37 billion RMB) set last year. Since the luxury tax penalty system was implemented in 2003, the Dodgers’ cumulative tax has reached $519.4 million (about 37.18 billion RMB), surpassing the New York Yankees’ $514.2 million (around 36.81 billion RMB) for the first time. The Dodgers’ total payroll including tax is $417.3 million (approximately 29.87 billion RMB), exceeding the Mets’ 2023 record of $374.7 million (about 26.82 billion RMB). This includes non-cash compensation worth $949,244 (around 6.8 million RMB) in Shohei Ohtani’s contract, such as home suite access and translation services.

The Mets’ payroll including tax stands at $346.7 million (about 24.82 billion RMB), which includes $369,886 (roughly 2.65 million RMB) in non-cash compensation paid for outfielder Juan Soto. His contract specifies that the team covers luxury suite fees, VIP tickets, and personal security expenses. After receiving a $400,000 (approximately 2.86 million RMB) bonus, Soto ended the season as the highest-paid player with a record $51,769,868 salary (about 3.71 billion RMB).

Other teams required to pay luxury tax include the New York Yankees ($61.8 million, about 4.42 billion RMB), Philadelphia Phillies ($56.1 million, roughly 4.02 billion RMB), American League champion Toronto Blue Jays ($13.6 million, approximately 970 million RMB), San Diego Padres (just under $7 million, about 500 million RMB), Boston Red Sox and Houston Astros (each around $1.5 million, about 10.74 million RMB), and Texas Rangers (about $190,000, approximately 1.36 million RMB). This year, nine teams must pay luxury tax, tying the historical record, with total tax payments reaching $402.6 million (about 28.82 billion RMB), exceeding last year’s peak of $311.3 million (around 22.28 billion RMB). Taxes are due by January 21 next year.

Before the 2024 trade deadline, the Blue Jays reduced their total payroll through a series of trades, successfully keeping their payroll under the threshold and resetting their tax rate tier, saving about $21 million (approximately 1.5 billion RMB) in luxury tax this season. Since the luxury tax began in 2003, 15 teams have been assessed a total of over $1.63 billion (around 116.68 billion RMB) in taxes.

The Dodgers, Mets, Yankees, and Phillies have paid luxury tax for four consecutive seasons. The Phillies’ total tax of $80.3 million (about 5.75 billion RMB) surpasses the Red Sox’s $53.2 million (approximately 3.81 billion RMB), ranking fourth highest since 2003. These four teams all exceeded the newly introduced “Cohen Tax” fourth-tier threshold set in the 2022 labor agreement, designed to curb spending by high-expenditure teams.

After paying luxury tax for two straight years, the Atlanta Braves lowered their payroll this year to $234.8 million (about 16.81 billion RMB), falling below the threshold. Among teams paying tax, the Mets, Astros, and Rangers all missed the playoffs. The Miami Marlins had the league’s lowest team payroll at $86.9 million (approximately 6.22 billion RMB), about one-fifth of the Dodgers’. The total payroll including tax for all 30 MLB teams rose for the second consecutive year by 2.3% to $6.06 billion (around 433.85 billion RMB).

Payroll including tax is calculated based on the average annual value of player contracts on the 40-man roster, plus approximately $17 million (about 1.22 billion RMB) in team benefits and the prorated arbitration-eligible player bonus pool. Deferred salaries and bonuses are discounted to present value. Due to exceeding the threshold for three consecutive years, the Mets, Dodgers, Yankees, and Phillies are subject to the highest tax rate tier, with rates up to 110% on amounts exceeding $301 million (approximately 21.55 billion RMB).

According to the labor agreement, luxury tax revenues fund player benefits, personal retirement accounts, and a supplemental league fund distributed to qualifying teams. The initial taxable threshold for next year is $244 million (about 17.47 billion RMB). If the four teams exceed the threshold again, the portion above $304 million (around 21.76 billion RMB) will continue to be taxed at 110%. Final data including 2025 salaries and related items have yet to be determined.