Aaron Rai’s historic PGA Championship win and his tax bill

U.S. tax implications

Professional golfers are generally taxed in the country where the tournament takes place. This means that regardless of where a player lives or is tax resident, the US has the right to tax all prize money earned at the PGA Championship.

For this year’s event in Pennsylvania, golfers face:

• US federal income tax, with a top rate of 37%
• Pennsylvania state tax, which applies because the tournament was held there

A golfer who is solely US tax resident will typically have no further tax to pay elsewhere on their PGA Championship winnings. However, for players with ties to other countries, including Rai, the picture can be more complicated.

UK tax residency considerations

Although born and raised in Wolverhampton, Rai now lives primarily in Jacksonville, Florida, spending most of the year in the US and his tax position depends on whether he is still considered UK tax resident.

If Rai is no longer UK tax resident

His UK tax exposure would be limited to UK‑source income only. In this case, his PGA Championship prize money would not be subject to UK tax.

If Rai remains UK tax resident

The position changes significantly. UK‑resident golfers are taxed on their worldwide income, meaning:

• Prize money from the PGA Championship would be taxable in the UK at 45% (or 48% if Scottish‑resident)
• The US retains primary taxing rights because the income arises from activities performed in the US
• The UK would then give foreign tax credit relief for US federal and state taxes already paid

Illustrative example

If a UK‑resident golfer won $3.6 million:

• UK tax at 45% = $1.62 million
• US federal and state taxes can be offset against this
• The remaining UK liability would depend on the exact US tax paid

This prevents double taxation but does not eliminate the need to consider both systems.

Tax scenarios in other jurisdictions

If golfer reside in jurisdictions with no income taxes, such as the UAE or Saudi Arabia, while still subject to U.S. taxes on their prize money, they face little to no additional tax obligations in their home countries.

Conversely, golfers from high-tax countries like Denmark, Austria, or Belgium may see their tax liabilities surpass McIlroy’s. These nations impose income tax rates of over 50%, making them some of the most taxing jurisdictions for professional athletes.

Beyond prize money: sponsorship and endorsement income

While tournament winnings attract the most attention, they are only part of a professional golfer’s income. Endorsements, appearance fees and sponsorship deals can often exceed prize money, and these earnings are also subject to tax.

The rules vary widely between countries:

• Some tax endorsement income based on where the player performs
• Others tax based on residency
• Some apply both, creating further complexity

For globally recognised players, this can result in multi‑jurisdictional tax filings each year.

A landmark win and a reminder of global tax complexity

Aaron Rai’s PGA Championship victory is a historic achievement and a major milestone for English golf. But like all international sporting success, it comes with a web of tax considerations that depend on where a player lives, competes and earns.

Understanding these rules, and how different jurisdictions interact, is essential for professional golfers navigating life on the global tour. With the right planning, players can stay compliant, avoid double taxation and ensure their hard‑earned winnings are protected.