Correct, here is a great read on it from Dunk
Why CFL players restructure their contracts
Posted on February 25, 2016 by Justin Dunk
While it’s easy to understand why Montreal Alouettes general manager Jim Popp would want to restructure the contracts of highly-paid stars like receiver S.J. Green and linebackers Chip Cox and Bear Woods – more salary cap flexibility – it does beg an important question: what’s in it for the player?
In a word: money.
American players pay income tax in Canada just like the rest of us do but a provision in the Canada-U.S. income tax treaty allows international players who maintain a permanent residence south of the border to be taxed just 15 per cent on any signing bonus – much less than their usual Canadian tax rate.
According to CFL sources, Green’s original contract called for a salary of $250,000 in 2016, meaning he would have expected to pay approximately $105,000 in federal and provincial taxes for take home pay in the $145,000 range.
Under the newly-restructured deal, Green will be paid $225,000 but he received a $100,000 signing bonus. The bonus is taxed at 15 per cent ($15,000) while the remainder is taxed less because of Canada’s progressive tax system which sees higher income earners taxed at a higher rate. His total tax burden now about $58,000, leaving $167,000 remaining.
So even though the Green’s total compensation is $25,000 less he is actually taking home $22,000 more – getting a significant chunk of that money immediately. Cox, meanwhile goes from approximately $190,000 to $160,000 with a $65,000 bonus and sees a net gain of around $6,000.
The Alouettes, meanwhile, have saved more than $50,000 off their $5.1 million salary cap.
http://3downnation.com/2016/02/25/cfl-p … contracts/