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Every NFL team has a spending limit on player salaries each year. In 2026, that number is $301.2M. Go over it, and the league comes knocking.

You have probably heard someone say “the cap isn't real.” It is. Teams literally cannot exceed the cap when the league year opens. What those people are actually talking about is how teams use restructures, void years, and post-June 1 cuts to shift money between years. The total bill never changes, though. You are always paying for it somewhere.

A player's “cap hit” is the total amount counting against the cap in a given year. It adds up from a few different pieces:

Signing bonuses do not hit the cap all at once. They get divided evenly (“prorated”) across the length of the contract, maxing out at 5 years. This is how teams turn a huge upfront payment into a manageable annual cap charge.

A $20M signing bonus on a 5-year deal? That is $4M per year on the cap instead of $20M in year one. The catch: if you cut or trade that player, all the remaining prorated money “accelerates” onto the current year as dead money.

Drafted players sign 4-year contracts where the salary is determined by their draft slot. Pick 1 gets more than pick 32, and pick 32 gets more than pick 64. The dollar amounts are set by the CBA, so there is no real negotiation on the numbers.

First-round picks also come with a 5th-year option. The team can pick it up after the player's third season. How much it costs depends on where the player was drafted and whether they made the Pro Bowl.

When a team cuts or trades a player, any leftover prorated signing bonus accelerates onto the cap. That is “dead money”: cap space eaten up by a player who is no longer on the roster.

Timing matters. A pre-June 1 cut dumps all the remaining prorated bonus into the current year. A post-June 1 cut spreads it out: this year's proration stays, and the rest moves to next year. Teams get two post-June 1 designations each year.

The league wants teams to keep signing experienced players, so the CBA includes a nice trick: the Veteran Salary Benefit (Article 26). When a vet with 3+ accrued seasons signs a minimum-salary deal, their cap charge gets capped at the 2-year veteran rate. The league picks up the rest.

So a 10-year vet on a minimum deal costs the same cap space as a second-year player. That makes vets on minimums some of the most cap-efficient signings a team can make.

The franchise tag is a one-year tender for pending free agents. The non-exclusive franchise tag pays the average of the top 5 salaries at the position (or 120% of the player's prior year salary, whichever is higher). Other teams can still make offers, but the tagging team gets the right to match. The exclusive tag also uses the top 5 average, but the player cannot negotiate with anyone else.

The transition tag is cheaper, using the top 10 average instead of top 5. The original team still gets right of first refusal on any offer sheet.

Tagging a player in consecutive years gets expensive fast: 120% of the prior tag in year 2, and 144% in year 3 and beyond. That is why you almost never see a player tagged three times.

A restructure converts base salary into signing bonus. Since signing bonus gets prorated over the remaining contract years (up to 5), this drops the current year's cap hit and pushes the cost into future years.

The player has to keep at least the veteran minimum as base salary. Restructures are the most common way teams create cap space, but they are borrowing from the future. The total cap cost does not go down. It just moves.

Performance bonuses get classified based on whether the player hit the same benchmark last season:

At the end of each season, the league settles up. NLTBE incentives that were earned get charged to the next year. LTBE incentives that were not earned become cap credits.