College athletic departments will now have to foot an additional bill when it comes to paying for top-dollar coaches.
Because of a change in the tax code effective this year, nonprofits will be required to pay a 21 percent excise tax on any compensation given to employees who make more than $1 million; the tax will be limited to an organization's five highest-paid individuals.
University of Kansas chief financial officer Pat Kaufman spoke about the change when discussing the athletic department's proposed budget during a board of directors meeting on Wednesday morning. Kaufman later told The Star that the department is budgeting an additional tax expense around $1 million, which could change depending on how tax advisers interpret KU men's basketball coach Bill Self's salary for next year.
Self's compensation for 2018-19 is just under $5 million, though his contract is complicated by a retention payment that will be paid at a future date. Football coach David Beaty, meanwhile, will make $1.7 million.
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Other schools will be affected as well. Kansas State, for instance, will pay roughly $777,000, based on the salaries of football coach Bill Snyder ($3.2 million) and men's basketball coach Bruce Weber ($2.5 million). Schools are required to pay excise tax on every dollar over $1 million that their high-salaried employees make.
Wichita State, which does not have a football program, is expected to pay $547,500 in tax for men's basketball coach Gregg Marshall.