For the teenagers competing in the Fortnite World Cup, filing taxes could have seemed like a foreign concept.

Even if players had to deal with some tax work from an odd job or a deal with an esports organization, having to pay back a significant amount of winnings can feel brutal.

When Bugha won the Fortnite World Cup he won a well-publicized prize of $3,000,000. But that prize falls under the American tax system’s highest tax bracket of 37%.

That means that every dollar he earned over 500,000 was taxed at 37%. Here’s a simple breakdown of American tax brackets, for simplicity sake we are going to say his entire prize was taxed at the top bracket. In reality, he will have about $30,000 extra after taxes.

After Uncle Sam collects, Bugha will be down to $1,890,000. A big drop, but not the worst thing in the world. But taxes aren’t done yet, because the tournament was held in New York, the richest state in the nation, they have one of the highest tax rates at 8.82%.

That takes off another $275,000. Now he’s down to $1,615,000. Hey at least it’s still over half. Fortnite World Cup runner-up Psalm was on Fox Business Network to talk about how he is dealing with the taxes that cut his $1.8 million to just over $900,000.

Fortnite World Cup Runner Up Psalm talked about taxes on Fox Business Network

But now lets go back to Bugha, because people arent done coming for his cash. Next up: Sentinels. Bugha was a relatively unknown player coming in to the event, he didn’t have any big finishes at the time of the signing and Sentinels signed him before he had even qualified for the Fortnite World Cup. So when signing a deal, Bugha was probably happy to trade a percentage of future prize winnings for a steady salary.

According to reports in the community, Bugha’s deal signs over 20% of his winnings to the organization. It isn’t clear if that percentage is taken out pre-tax or post-tax so we can calculate both.

Total winnings if Sentinels percentage comes pre-tax: $1,015,000

Total winnings is Sentinels percentage comes post-tax: $1,292,000

It’s a brutal wake-up call for the young star. even if you win the biggest individual prize pool in esports history, you still need to keep the government happy.

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Mitch is a writer who used to be a sports broadcaster. When not playing or writing about Fortnite he also plays too much Rocket League and Hearthstone. You can see more of Mitch's work by following his Twitter @Mitch_Reames. Feel free to pitch stories you want to see him cover by tweeting at him or sending him a DM.

9 COMMENTS

    • Nah, I’d rather pay my taxes and have the services they provide. I don’t feel the least bit bad for the rich having to pay their fair share of taxes (though with the current administration in the US the rich are paying even less than the middle class and poor than they were under the previous administration, they’ve opened up the loopholes instead of closing them).

      • That’s a lie, but thanks for trying. The top percentage of earners pay 90% of the taxes, so stop deluding yourself. And thanks for trying to blame Trump, but make sure to ignore the deals Obama cut for his cronies.

  1. I think it sounds harsh because you think you’re winning THREE million but walk away with around half. These are the laws around prize winnings in NY state though. Uncle Sam always gets paid.

  2. The money that funded the tournament was taxed when earned. The money spent to host the tournament was taxed. The money he won was taxed. Anything he buys with it will be taxed. If he invests and and the investments pay off, he’ll be taxed. And more than 50% of those tax dollars will not feed the hungry, house the homeless, heal the sick, or help the poor. It’s time to dump some more tea.

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