Who gets bigger bonuses — a losing Super Bowl team or the average Wall Street employee?

That amount might leave some well-heeled financial professionals feeling pretty cold, too, about their own year-end performance pay. The average 2022 bonus on Wall Street was $176,700, according to a yearly report from the New York State Comptroller’s Office.

Each 49er will get $45,500 for their first-round bye; $50,500 for winning the divisional playoff round; $73,000 for winning the conference championship; and $89,000 for being on the losing team at the Super Bowl. (For context, 49ers quarterback Brock Purdy has a four-year, $3.7 million contract with a yearly salary averaging just over $930,000, according to Spotrac.)

Meanwhile, each Kansas City Chiefs player is slated for $338,000 in bonus pay. That’s $50,500 for their Wild Card win; $50,500 for the divisional round; $73,000 for the conference championship; and $164,000 as the winning Super Bowl team. Players on the team’s active roster, inactive list or injured reserve at the time of the game are all paid the full amount, the agreement states.

In the world of professional sports, six-figure sums are small potatoes. Super Bowl MVP Patrick Mahomes is working under a 10-year contract worth $450 million, according to Spotrac.

“This is not even chump change for him,” said Alan Johnson, managing director at Johnson Associates, a financial-services compensation consulting firm.

It might be chump change, but at least it’s guaranteed. NFLers can count on the bonuses outlined in their agreement with the league, while Wall Street bonus amounts can be whipsawed by the markets.

In 2022 — a year when inflation and rising interest rates roiled markets — the average Wall Street bonus of $176,700 marked a 26% decline from the previous year, when the average year-end payout was $240,400, according to the New York State Comptroller’s Office. In 2022, the $33.7 billion vat of money for bonuses fell from $42.7 billion a year earlier, the office said.

The stock market made a comeback in 2023, but the recently concluded year isn’t looking so hot for Wall Street bonuses, according to Johnson.

The 2023 bonuses getting paid out in 2024 are projected to stay flat or decline, according to Johnson’s firm. For example, people in investment-banking advisory work may see a 15% to 25% year-over-year drop in the value of their cash bonuses and equity awards, according to the firm.

Johnson’s firm analyzes different bonus figures from a tighter range of financial professionals than the Comptroller’s Office does. By his count, a yearly bonus in the range of $300,000 to $500,000 is common, Johnson said. Seven-figure bonuses “are not common” and reserved for the top 5% to 10% people at a firm, he said.

Wall Street bonuses aren’t just icing on the cake of finance jobs: They often represent a large chunk of a Wall Street employee’s compensation. For lower-level employees with bonuses in the $300,000 to $500,000 range, their bonus could be 50% of their pay. For Wall Streeters with a seven-figure bonus, that might be 60% to 80% of their pay, he said.

While six-figure bonuses may not add much to the total compensation of superstars like Mahomes, a rookie NFL player making the league minimum of $795,000 should enjoy a noticeable bump in their pay from a postseason bonus.

Johnson sees pay parallels between the football field and the C-suite. Each career can be short-lived with cutthroat competition and lots of burnout.

Careers in the high end of financial services can typically end in a person’s early 50s, he said. It’s safe to say a football-playing career is even shorter.

“For the amount of money these people make, it should be a grind, it should be competitive,” Johnson said. That statement holds true for both finance and football, he noted.

What about taxes on bonuses?

The Internal Revenue Service is another team that gets a shot at the money, and players have to play by the tax agency’s rules.

Bonuses — in sports and other arenas — are completely taxable, said Robert Raiola, a director at the sports and entertainment group within PKF O’Connor Davies Advisory. His practice includes handling tax matters for NFL players, including two with the Kansas City Chiefs.

The IRS says it includes bonuses with other types of “supplemental wages” that aren’t an employee’s regular wages. Commissions, overtime, severance and pay for accumulated sick leave also count as supplemental wages, the agency said.

There are a couple of ways employers can play it. For instance, they can lump the bonus with regular wages and withhold “as if the total were a single payment for a regular payroll period,” the agency said.

But Raiola said a more common approach is paying the bonus separately and withholding 22% in federal taxes on amounts under $1 million. There’s 37% withheld on amounts above $1 million, he said. For his NFL clients, the bonuses are separate from the paychecks they receive over a 36-week span.

The bonus money is treated as ordinary income, Raiola noted. If the bonus amount is under $1 million, but the recipient’s income reaches to the top tax bracket with its 37% marginal rate, they’d have to pay more to the IRS at tax time.

In a game where speed counts, Raiola noted that his NFL clients have already been paid their playoff-bonus money. Now, they’re just waiting on their Super Bowl bonus check.