Dodgers Paying Record Luxury Tax Total For 2025 Season

The Los Angeles Dodgers won their second consecutive World Series in the 2025 season, but it didn’t come cheap, as they had the most expensive roster in MLB history.

The competitive balance tax threshold for the 2025 MLB season was set at a record-high $241 million, but the Dodgers blew past that with a payroll of $417.3 million.

As a result of going over the luxury tax threshold for at least three straight seasons — with the Dodgers now at five consecutive years — and due to their total over the threshold, they were levied additional surcharges.

The Dodgers ended up paying a 50% rate on their first $20 million above the threshold, a 62% rate on the next $20 million, a 95% rate on the $281 million to $301 million and a 110% rate on any amount over that.

That means the Dodgers were charged with a record luxury tax just shy of $170 million, according to Ronald Blum of The Associated Press:

The Los Angeles Dodgers will pay a record $169.4 million luxury tax after winning their second straight World Series title, raising their two-year tax bill to $272.4 million.

In total, the World Series roster cost the Dodgers $586.7 million based on their payroll total and luxury tax, however, the true total is a little different due to luxury tax hit calculations on contracts.

The Dodgers paid $456 million for their 2024 World Series, bringing their total over their two championship seasons to $1.04 billion.

The Dodgers previously set the luxury tax record last season when they paid $103 million, giving them an increase this year of about $67 million.

This is also the 10th time the Dodgers have gone over the luxury tax threshold since the Guggenheim Baseball Management Group took control of the club in 2012.

Luxury tax funds are used in a variety of ways, with the first $3.5 million going to fund player benefits and 50% of the remainder funding player Individual Retirement Accounts.

The other 50% of the remaining total is distributed among teams that receive revenue-sharing money.

Dodgers joined by other teams paying luxury tax

In addition, eight other teams joined the Dodgers in paying a luxury tax bill for the second consecutive season, tying the record for most MLB clubs paying the tax.

Joining the Dodgers were the New York Mets, New York Yankees, Philadelphia Phillies, Toronto Blue Jays, San Diego Padres, Boston Red Sox, Houston Astros and Texas Rangers. No team aside from the Dodgers paid more than $92 million in taxes.