IPL Auction: Indian Premier League is the wealthiest domestic T20 league in the World, attracting top talent from all over the World.

IPL franchises will spend millions on sponsorships and television deals to get the best players. In this article, we will decode the salaries of IPL players.

IPL Players Overview

Indian Premier League (IPL) is one of the wealthiest domestic T20 leagues worldwide and draws top talent from all corners. IPL franchises will spend millions in sponsorship and television deals to attract the best cricketers.

Importantly, it should be noted that the IPL features two types of players – Indian players and overseas players. An Indian player’s minimum salary (approx. INR20 lakhs) while top performers can often earn significantly more due to various elements contributing to their salary package.

How Does The IPL Make Money?

IPL sponsors are the primary source of income. Tata, Jio and Dream 11 are significant sponsors for IPL 17 (to take place in 2024).

Of this revenue generated from the BCCI/tournament (approximately 60%), about 60% is divided evenly amongst franchises as guaranteed income from official league sponsors each year.

• Broadcasting rights generate a massive amount of revenue for Jio Cinema. They recently agreed with BCCI worth Rs. 23,758 crore to ensure they can purchase media rights until 2023. 
• Every team has sponsors; these are often more important than player shirts in creating publicity. Sponsors who sign contracts with franchises often generate greater exposure for themselves and the team they support.
• IPL revenue can be generated from ticket sales to stadium matches. At the same time, franchises see significant earnings during “home” matches. Furthermore, stadiums sell food, drinks and merchandise such as T-shirts or souvenirs to help generate additional funds from revenue generated during a match’s “host” match; most activities in such stadiums are overseen by team hosting game(s) owners.
• Teams also earn revenue through player trades and transfers annually, and by winning the IPL, they could make even more.

What is the IPL Players Salary?

IPL Salary Structure: The IPL pays its players in the following ways:

• Before any team can begin its season in the IPL, they must select suitable players for success in such an arduous competition.
• Each team receives a purse to bid at the auctions. Since groups cannot exceed this value, it is crucial that aggressive bidding occurs without exceeding it.
• Franchises purchase players for an entire season at an initial bid price; any winning bidders sign them after winning their bids.
• The salary of an IPL player depends upon their availability throughout the entire season; his salary can be affected if they cannot participate in all matches; this situation frequently arises with foreign players having to leave midway for national duty duties, which puts pressure on franchisees to find replacement players quickly.
• IPL has provided domestic players with a significant financial boost and increased job security as they participate in tournaments. If their team wins the championship, players also receive handsome incentives, and some portion of its prize pool money will be divided among all its players.
• Players have an excellent chance of winning big during an IPL tournament, even before its end. Following each match, prizes are awarded to the best fielder, the player with the most sixes and the man of the game; additionally, IPL will honour those holding orange or purple caps (most runs or wickets, respectively) after their tournament ends.

IPL Fees

IPL fees paid to cricketers by team owners include multiple components. These fees include base and match payments and signing fees, which are taxed.

The base fee covers what team owners owe players who join their teams. At the same time, match payments provide compensation for participation in games. Signing fees cover what team owners pay the player when signing him up as part of their rosters.

The Components Of The Salary Structure Of IPL Players

Take a look at each component of the salary structure.

• Base Salary- This amount will remain constant during a season and depends on an individual player’s performance, experience and auction demand. Top players could earn INR15 crores (approx.), with Indian players earning up to $2 million and $2.2 million, respectively, for overseas players.
• Match Fee – Players also receive an additional match fee payment after every game they participate in, depending on their salary base and how many matches they’ve been involved with; top players’ match payments have reached INR 1.5 crores (approx. $200 000) per match!
• Signing bonus – Some players receive a signing bonus as part of their contract, which provides one lump-sum payment upon signing it and may represent as much as 10% of their salary.
• Prize Money – After each IPL season, franchises compete to claim an impressive prize pool worth roughly INR 20 crores ($2.7 Million). Furthermore, some franchises offer bonuses to individual or team players depending on their performance during the tournament.
• Endorsements – IPL athletes are among the most marketable in the World. Many have lucrative sponsorship agreements with different brands, sometimes earning even more from endorsements than their IPL contracts!

Taxes and deductions are also essential to consider. Indian taxation is based on income tax slabs.

The Salary Structure Of IPL Players

Payment is made in three instalments. According to the latest IPL contract, the following payment structure was proposed:

• 10% within ten days after the first match of the season.
• 60% during the season
• After the end of the season, you can get 20% off.

This structure was used in IPL 2023.

According to income tax regulations, franchises will deduct TDS before paying out funds to players. Indian players are charged 10%, while foreign players face 20% charges for this tax.

Players are required to sign an agreement tripartite between themselves, the BCCI and their franchise regarding payments. Suppose the franchisee pays differently than agreed. In that case, the BCCI will make payments directly and deduct relevant amounts from its central revenue fund.

Payments to IPL Players In Certain Circumstances

Certain conditions apply to the payment of IPL players:

If a player was bought for Rs. 10 crore (Rs. 100 crore), the amount paid is for one IPL Season: In the case of 10 Crore, payment is made in the following way to IPL players:

• The players’ contract is for years.
• The player is entitled to Rs 30 or 300 crores (Rs 10 billion per season, depending on availability).
• It is interesting to note that all squad members will receive their full payment, regardless of whether or not they are chosen for the playing XI.

The cricket associations of foreign countries will receive 20% of what the players earn during the IPL: Suppose the player is from a foreign country. In that case, the cricket association of that country will receive 20% of their IPL earnings and pay it to the IPL players in this manner:

• When West Indies players are auctioned for Rs fifty crores each, their purchase fees are split equally between BCCI, their respective franchises and WICB.
• Since 2008, player salaries in the IPL have been paid in US dollars; in 2012, however, these payments and auctions were conducted using Indian rupees instead.

In case of injury, the player will receive his full salary. The franchise will cover his medical expenses: If you are injured, the payment will be made as follows:

• If the BCCI cannot conduct the IPL for the entire season, all players will receive their salaries.
• The BCCI compensates Indian players under contract with the BCCI, even if the player misses the IPL as a whole due to an injury.

Taxes on IPL Player Salaries

Indian law levies a 20% tax on the salaries of foreign players, which the IPL franchise deducts from the source before making payments to these players. So, for an overseas player earning $1 Million as their base salary, the franchise will deduct $200,000.

Indian players pay taxes based on the income tax slab. IPL franchises deduct tax at the source before paying players; additionally, TDS must be removed from match fees paid out.

• Taxation on Fees Received by Cricket Players From IPL Team Owners: The fees received by cricketers from IPL team owners are taxable according to the Income Tax Act 1961. The players’ payments are taxed at the current tax rate.
• Indian Players Taxation: Indian players on IPL teams will be subject to Indian Income Tax laws when filing taxes for IPL earnings, which will be added to their total income and taxed according to tax rates and slabs. Indian cricketers may be taxed differently. Income tax slabs are listed below for the financial years 2022-23:

Income Tax Slab	Tax Rate
Up to Rs. 2.5 lakh	Nil
Rs. 2.5 lakh – Rs. 5 lakh	5%
Rs. 5 lakh – Rs. 7.5 lakh	10%
Rs. 7.5 lakh – Rs. 10 lakh	15%
Rs. 10 lakh – Rs. 12.5 lakh	20%
Rs. 12.5 lakh – Rs. 15 lakh	25%
Above Rs. 15 lakh	30%

• Taxation of Foreign Players: Foreign players participating in IPL teams will be taxed according to Indian Income Tax laws if their physical presence in India exceeds 182 days during any financial period. IPL income would then be added to their overall revenue and taxed at their applicable tax rate.
• Taxation of Foreign Players Who Are Not Physically Present In India: Foreign players not present physically for more than 182 days during a fiscal year are exempt from being taxed under Indian Income Tax Laws; they may, however, be taxed under their home countries’ tax regulations.
• TDS Collected from IPL Team Owners for Fees Paid to Cricket Players: The owners of IPL teams deduct tax at source from cricket players’ fees paid, according to current rates, with TDS removed by IPL team owners and deposited in India’s government on behalf of players.

Conclusion

Taxation applies to IPL owners’ payments of player fees to cricketers. Cricketers must remit tax according to their individual income tax slabs on IPL fees earned;

Indian cricketers will pay tax as per their applicable slab, while foreign cricketers are subject to TDS under Section 194E.

Cricketers must understand what IPL fee tax implications exist and pay their due taxes promptly to avoid penalties or legal action from IPL owners.

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