Following his win at UFC on ESPN 12 this previous weekend, Mike Perry stated that it felt like he didn’t even combat for “minimal wage” after paying all of the taxes he owed.

In reality, Perry has beforehand addressed his cash points after preventing Vicente Luque in Uruguay final yr and afterwards he claimed he made $58,000 to point out and after paying worldwide taxes, administration charges and taxes from 2018, he was left with simply $6 within the financial institution.

After listening to from Perry on Saturday night time, retired UFC welterweight contender Ben Askren chimed in with a tweet the place he warned different fighters that taxes might run wherever between 30 to 50 p.c of the cash they earn and all of them ought to “plan accordingly.”

Whereas Perry is the newest, there have been different fighters caught in tax issues previously and Askren says that’s a serious pitfall of the pay system in combined martial arts with each promotion together with the UFC.

“The issue with fighters is — and I do know this occurred to me the primary yr I paid taxes and I used to be not a fighter, I used to be a wrestler and I used to be doing wrestling camps — I didn’t pay the estimated taxes quarterly,” Askren defined when talking to MMA Preventing. “So when it was time for my yr finish invoice, I used to be like holy sh*t I owe how a lot?

“Clearly, I wasn’t making large sums of cash at the moment. I made a good quantity that yr. These fighters are making far more and nothing is deducted from their purse. They make $50,000 — they make $50,000. There’s nothing deducted from their purse. And so I’m certain a few of these guys who do not know in regards to the taxes they should pay, they go forward and spend that $50Ok and little do they know they in all probability owe someplace between $15,000 and $20,000 in taxes relying in your state and your earnings stage.”

As UFC president Dana White has famous on quite a few events, fighters are thought of impartial contractors quite than workers, which requires a special stage of consideration being paid when a tax invoice comes due.

Whereas impartial contractors are allowed to say enterprise bills associated to their jobs, there are nonetheless a large number of taxes that should be paid. That’s why Askren factors out {that a} fighter making a lump sum of $50,000 may sound like a good paycheck however the authorities is totally going to take an enormous chunk of that.

“Impartial contractors pay extra in taxes as a result of they pay either side [Medicare and social security], I feel it’s 14.2 p.c,” Askren stated. “Whenever you’re employed, your employer pays half of that. However when you’re an impartial contractor, you pay either side of that as much as the primary $120,000 or so. Then you definately’re speaking 7 p.c of $120,000, that’s like an additional $9,000 in taxes you’re paying that standard individuals don’t pay.”

One other downside fighters could face when advancing of their careers and making more cash is the extra taxes owed.

“Perhaps one yr you make $40,000, you’re in a really low earnings tax bracket and also you in all probability have numerous write offs to cowl that,” Askren stated. “Then subsequent yr possibly you get a brand new contract otherwise you get a knockout of the night time bonus and also you make $150,000 as an alternative of the [$40,000] you made within the yr earlier, then rattling that’s going to be an entire lot of taxes trigger you’re in a brand new earnings bracket now.”

Past taxes, Askren additionally believes fighters want to begin planning for the long run now whereas they’re competing as a result of the paychecks earned from promotions just like the UFC could have to offer for them for years to come back.

In Askren’s case, he opened quite a few wrestling academies throughout his profession which have offered him monetary stability now that he’s retired from preventing. He additionally made investments that can proceed to pay dividends for years to come back.

Different athletes like Daniel Cormier have opened eating places whereas many fighters open gyms and capitalize on the abilities they’ve attained to then go onto the following technology of athletes.

No matter it is perhaps, Askren believes all combined martial artists want to begin trying forward or they’re going to be caught in a perpetual loop the place preventing is all they’ve and it’s the one means they will make a residing.

“As an grownup, you additionally should look out to your future trigger in any other case you get caught on this entice the place you’ll be able to actually by no means depart,” Askren stated. “As a result of when you’re used to creating ‘X’ quantity say $200,000 a combat and people are guys which are getting paid very, very effectively. So that you’re getting paid $200,000 a combat and so they don’t have any exterior earnings, like they don’t develop any expertise and so they step away from that $200,000 a combat, which is let’s say leading to half-a-million {dollars} a yr and get used to residing on half-a-million {dollars} a yr and so they don’t save up.

“I gave myself a 3 to 5 yr window, a runway the place I might develop my companies and all the things else to the place I might dwell very comfortably with out tightening the belt.”

Saving cash together with investments allowed Askren to comfortably retire from preventing with out worrying that he’d be broke inside the following yr.

“Give your self a runway and produce other issues that you just’re doing,” Askren stated. “That’s sort of how they’ve to consider it. Yeah, I made in all probability near $1 million final yr while you embody all the things. I’m not going to make that any time quickly however I really feel like I made the correct investments and I saved sufficient of it to the place I’ve a runway the place I’m making a reasonably good residing and I’m going to proceed creating my companies and develop different issues I’m doing as effectively.

“Not simply investments however discover different expertise. As a result of even if in case you have sufficient cash, you’ve obtained to do one thing otherwise you’re going to be bored as sh*t. Actually discover one other job, discover a talent, discover a passion, discover one thing you’re captivated with and use your notoriety that you’ve when you’re preventing to develop that enterprise or that passion or no matter it’s.”

Clearly each fighter competing within the UFC or Bellator or different main promotions make totally different quantities of cash, which can then drive how a lot they will save or make investments.

If nothing else, Askren affords one piece of recommendation to all athletes throughout the game with regards to cash, taxes and a future that isn’t spent in poverty.

Jon Jones had a tax lien on him [Donald] Cerrone’s had a tax lien on him. James Toney had a tax lien on him. This isn’t completely new,” Askren stated. “This isn’t a model new factor by any means.

“I’d say simply rent individuals who even have your finest monetary curiosity in thoughts. That’s sort of laborious to search out typically. Clearly, I feel it’s a must to have a primary quantity of knowledge your self so that you don’t get taken benefit of.”