What is the New York Yankees' payroll this season?

There's a reason they're being so careful.
Aaron Judge Press Conference
Aaron Judge Press Conference / Dustin Satloff/GettyImages

The New York Yankees, famously, have never been subjected to many payroll constraints, but MLB would love if Hal Steinbrenner could feel as uncomfortable as possible.

They've put several measures in place to curb big-market spending in recent decades, and while they're not always specifically targeted at the Yankees (in fact, they're now being named after Mets!), New York's bulk has certainly been a driving force in their implementation.

Perhaps someday the Yankees will embrace the Dodgers' devious set of deferrals and find a way to shrink their luxury tax bill inauthentically through manipulation. For now, they're saddled with plenty of hefty costs on their active payroll -- yes, partially because they stretched DJ LeMahieu's contract out for six years to lower its AAV/tax implications.

Yankees Payroll 2024

The Yankees have an active payroll of $306,204,372, and a Luxury Tax Payroll (estimated) of $314,652,658. That's per Spotrac, and includes all current Yankees allocations, including injured players and sunk cost commitments.

That's a lot! It remains unfair to accuse Hal Steinbrenner of not spending, though it's fair to question whether his money has been spent properly, or whether he's spending commensurate with the franchise's current profits. They are the Yankees, after all, and have a theoretical financial advantage unlike any other team (except, possibly, Cohen's Mets).

What is the Luxury Tax Threshold in MLB?

In short, it's a cheeky way to make sure that MLB's richest owners are still intimidated by something. In practice, there are multiple levels to the ladder, and every time an MLB team passes one, they must contribute additional revenue sharing funds to baseball's lower spenders. That includes the newly introduced Steve Cohen Tax, an additional level named after the Mets patriarch, who has a wallet that cannot close.

Otherwise known as the Competitive Balance Tax (but colloquially referred to otherwise), the 2024 line of demarcation is $237 million, and teams are "punished" if they've exceeded that level by the end of the season. Technically, the Yankees could duck it by shedding massive amounts of salary immediately, but that will not be happening. If you exceed that threshold by $60 million or more (that's the Cohen tax), you're charged 60% on all expenditures.

Per MLB, if you exceed the lowest level once, you're taxed 20% on "all overages". Two years in a row? 30%. Three consecutive seasons? 50%. The Yankees are currently subject to that surcharge and more!

Why Are Yankees Being Taxed at 110% on 2024 Purchases?

A 50% rate for exceeding the lowest CBT level three straight years, plus the 60% Cohen Tax for being $60 million above the baseline in active payroll, and boom, 110%. That's why signing Blake Snell would've cost the Yankees nearly $70 million for 2024 -- unless they could've gone absolutely hog wild and shed a monstrous chunk of their payroll obligations in a flight of fancy.

Fans have no interest in the team being careful in Juan Soto's arrival year, but sometimes, "excess" spending comes back to bite a team these days. Just have to make sure every cent of payroll counts.