The luxury tax and you: A primer
But that's not how the payroll is calculated for luxury tax purposes.
In some instances, that can benefit the Phillies. Chase Utley made $15 million in 2011 and $15 million in 2012, but he counts for only $12.14 million against the luxury tax.
Ultimately, the two figures do not differ greatly.
* = estimated salary at major-league minimum of $480,000
The Phillies typically avoid arbitration hearings at all costs. They can be messy and detrimental. Since arbitration began in 1974, the Phillies have entered eight hearings. They have won seven and lost one, that one being the most recent in 2008 with Ryan Howard.
So if Pence makes $9 million in 2012 and $10 million in benefits is added, the Phillies hit that mythical $178 million figure. If he's at $11.8 million, they could go over.
The threshold then increases to $189 million in 2014. So, logically, it would make most sense for the Phillies to be amenable to paying the luxury tax in 2013 because with the higher ceiling in 2014, they could avoid it. Once a team skips a year in paying luxury tax, they receive amnesty and return to the original rate of 17.5 percent.
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