Key takeaways
- Read a cap hit as a schedule, not a price: base salary counts in the year it is earned, and a signing bonus is divided evenly over the contract, for no more than five years.
- Before judging a release, subtract what accelerates: the bonus not yet charged, plus any salary still guaranteed, stays on the cap as dead money, so the real saving is smaller than the cap hit.
- Treat every restructure and every void year as borrowing against future cap room, because the deferred bonus comes back as dead money if the player leaves.
- Use the June 1 line deliberately: it keeps only the current year's slice on this season's cap and moves the rest to next season.
- Unused room is not lost; a club can carry it into the next league year with a written notice the league must receive by 4 p.m. New York time on the day after its final regular-season game.
The NFL salary cap is a hard ceiling on what a club's contracts may count in a league year — $301.2 million for 2026, the same for every team — and no club's Team Salary may exceed it. What counts is not the cash a team pays that year but each contract's cap hit, worked out under accounting rules in the 2020 collective bargaining agreement. Base salary counts in the year it is earned. A signing bonus is divided evenly across the contract, for no more than five years. And any part of that prorated bonus not yet charged when a player leaves lands on the cap at once, as dead money.
Those three rules explain most cap headlines. The clearest way to see them work is to follow one contract from signing to release.
Where the number comes from
The agreement says the cap is calculated under its Article 12, a long chapter titled "Revenue Accounting and Calculation of the Salary Cap", and that it "is the same amount for each Club" (Article 13, Section 1). Section 2 is a single sentence: no club may have a Team Salary that exceeds the cap. That is what makes the league's system a hard cap rather than a soft cap with a tax — the distinction our guide to salary cap basics covers for games in general.
The league's operations site gives 2026 as $301.2 million, up $22 million from 2025's $279.2 million and the first cap to pass $300 million. Two lesser-known rules sit alongside the ceiling:
- A floor on cash. Article 12 guarantees minimum team cash spending of 90 percent of the caps across multi-year periods — 2024 to 2026, and 2027 to 2030.
- The offseason 51. Between the start of the league year and the first day of the regular season, base salaries for players outside a club's 51 highest-valued contracts count only to the extent they exceed a minimum-salary threshold (Article 13, Section 6(a)). Full rosters are counted once the season starts.
One contract, followed through the cap
Take an invented contract: five years, $100 million in total, made of a $20 million signing bonus and base salaries of $8m, $14m, $18m, $20m and $20m. Assume no other bonuses or incentives, no guaranteed base salary, and that the bonus is paid in year one.
| Year | Base salary | Prorated bonus | Cap hit | Cash paid |
|---|---|---|---|---|
| 1 | $8m | $4m | $12m | $28m |
| 2 | $14m | $4m | $18m | $14m |
| 3 | $18m | $4m | $22m | $18m |
| 4 | $20m | $4m | $24m | $20m |
| 5 | $20m | $4m | $24m | $20m |
| Total | $80m | $20m | $100m | $100m |
Both columns add up to $100 million; only the timing differs. That gap is the whole meaning of "prorated bonus": the agreement prorates a signing bonus "over the term of the Player Contract" on a straight-line basis, "with a maximum proration of five years" (Article 13, Section 6(b)(i)). Base salary, by contrast, counts in the year it is earned. The league's contract guide adds that roster bonuses count in full in the season they are earned unless they were fully guaranteed at signing, and that teams use them precisely to avoid the proration that pushes dead money into later years.
Releasing him: dead money and the June 1 line
Now suppose the team cuts the player after two seasons. Three slices of bonus — $12 million — have not yet been charged. The league's guide calls this money a team "has already paid or has committed to paying" that has not yet hit the cap, and it does not disappear on release. It accelerates.
When it lands depends on the date:
| Released | Dead money in year 3 | Dead money in year 4 | Year-3 cap saving |
|---|---|---|---|
| Before June 1 | $12m | $0 | $10m ($22m − $12m) |
| After June 1, or with a June 1 designation | $4m | $8m | $18m ($22m − $4m) |
The agreement's Section 6(b)(ii) supplies both rows. Before June 1, every unamortised dollar counts in the current league year. After June 1, only the current year's slice stays, and the future slices count "at the start of the next League Year". Each club may also designate up to two contracts released earlier in the league year to be treated as if terminated on June 2 — but the old charge stays on the books until then, so the saving arrives in June rather than at the start of the league year. In the agreement's Final League Year, 2030, the split disappears and everything accelerates at once.
Three more details change real decisions:
- Guarantees. Team Salary includes amounts a club "has paid or is obligated to pay" to current and former players (Article 13, Section 5(a)). Had the year-three salary been guaranteed for skill, cap and injury — the league's three categories of guarantee — cutting him would have freed no room in year three: the guaranteed $18 million would still count, on top of the bonus that accelerates.
- Trades. If he is traded instead, the acquiring club's Team Salary includes no part of his signing bonus; the remaining slices accelerate onto the team that paid it.
- Rebuilds. Taking a large dead-money year on purpose to clear future seasons is a strategic choice, and rebuild versus retool is the framework for deciding whether that is the season to do it.
Restructuring: space now, paid for later
The league's guide describes the standard restructure as converting part of a player's base salary (or a roster bonus) into signing bonus "to create immediate cap relief". The agreement treats money paid for contract modifications as signing bonus, so it is prorated over the years that remain.
Back to the example, at the start of year three. Convert $15 million of the $18 million base salary into bonus, prorated over the three remaining seasons at $5 million each:
- Year 3 cap hit: $3m base + $4m original slice + $5m new slice = $12m (down from $22m).
- Years 4 and 5: $20m + $4m + $5m = $29m each (up from $24m).
The total is still $100 million. But if the player is now released before June 1 of year four, the dead money is $8 million of original bonus plus $10 million of restructure bonus — $18 million instead of $8 million. A restructure is a loan against future cap room, and the interest is paid in dead money if the player declines.
Void years
A void year is a contract year written to cancel itself before it is played. The agreement does use the idea: it defines an "Automatic Voidable Year" as one that "shall void automatically upon a specified day or date or upon the achievement of a roster condition", and it bans voidable-year provisions from rookie contracts outright (Article 7, Section 3(d)).
Teams add them for one reason — proration follows the term. The proration rule counts the contract's years except those a player can cancel at his sole control, and a year the player can terminate based on a contingency counts until the contingency is met, at which point whatever was assigned to it accelerates (Article 13, Section 6(b)). So the same $20 million bonus on a contract with two real seasons and three void years is charged at $4 million a year instead of $10 million during the two seasons actually played.
The bill is deferred, not cancelled. The league's guide calls dead money a sunk cost that "must be accounted for against the salary cap", so the $12 million parked in the three void years returns as dead money when they void. A rising cap makes a fixed future charge smaller relative to the room available — the league's figures show the cap passing $200 million in 2022 and $300 million in 2026 — but it is still a debt.
Rollover: carrying unused room forward
Room a team does not use can be moved into the next season. Under Article 13, Section 6(b)(v), a club designates the amount in a written notice signed by the owner, which the league must receive before 4 p.m. New York time on the day after the club's final regular-season game. The designated amount is charged to the current year and credited to the next. If a club designates more than it has left, the notice is cut back automatically to its actual room.
Worked example: a club files notice to carry $9 million but finishes the season with $6 million of room. The notice becomes $6 million, this year's room drops to zero, and next year's Team Salary receives a $6 million credit.
Incentives: counted on last year's evidence
Incentives count now if they are "likely to be earned" based on the prior season's performance, and not if they are unlikely (Article 13, Section 6(c)). The books are squared the following year: an unlikely incentive that was actually earned is charged to the next season when it pushes the club over the cap, and likely ones that were missed can come back as a credit. Incentives in the first year of a rookie contract are deemed likely. That timing is why an incentive-heavy contract can look cheaper in the season it is signed than it turns out to be.
What carries over into a GM game
Football Franchise GM League does not claim to reproduce the agreement's accounting; its Salary Cap Draft turns the same constraint into a draft-day budget that "rewards spending well and exposes the units you skimped on", and Franchise Mode and GM Mode extend control past draft day. The lesson that transfers is the one in the tables above: money committed in one place is unavailable everywhere else, and moving it in time does not make it cheaper.
The football draft simulator guide shows how that plays out position by position, free agency explained covers the market these contracts are signed in, and the wider sports GM games library and American football hub collect the rest.
Good to know
Frequently asked questions
What is dead money in the NFL?
How is a signing bonus counted against the NFL salary cap?
What is a June 1 designation?
Can NFL teams roll over unused cap space?
What is a void year in an NFL contract?
How much is the NFL salary cap in 2026?
Sources
- 2020 NFL-NFLPA Collective Bargaining Agreement (executed copy), Articles 7, 12 and 13 (opens in a new tab)National Football League and NFL Players Association (hosted by the NFLPA) — accessed
- NFL Salary Cap (opens in a new tab)NFL Football Operations — accessed
- Contract Language: NFL contract terms, salary structures and player compensation rules (opens in a new tab)NFL Football Operations — accessed
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