Understanding The Structure of an NFL Contract and Salary Cap Hits

As we embark on a new season, let’s dive into the parts of an NFL contract and their impacts on a cap charge during the 2026-27 NFL calendar year.

First and foremost, let’s talk about what a cap charge is. A cap charge is what a particular team is being charged for a particular player based on the component of his contract. Every dollar a team spends on a player will count eventually as part of a cap charge, but not necessarily in the year spent.

Paragraph 5 Salary

In a standard NFL contract, the base salary, or the salary the players are paid specifically for the games, is located in the fifth paragraph. This salary counts in full for the team for the season (unless the player is traded or cut).

Prorated Bonus

There are two different prorated bonuses: signing and option. These bonuses are lump sum payments to a player that are prorated for the life of the contract for a maximum of five seasons. So, a five-year contract that has a prorated bonus of $25 million has it count for $5 million per season. If a player is cut or traded, the remaining proration is accelerated based on when the transaction takes place.

Roster/Workout Bonus

These are lump sum payments for being on the roster on a certain date or participating in a certain percentage of the offseason program. These count in full in the season in which they are scheduled to be earned. If a player is cut or traded before earning it, there’s no penalty to the team.

Per-Game Roster Bonus

A per-game roster bonus is a bonus added to a game check for being on the active roster for a game during the regular season. For instance, if a player has a per-game roster bonus of $1 million, if he’s active for all 17 games, he will receive an addition $1 million of salary for the season.

Incentives

These are additional pay for reaching certain individual and team milestones.

Likely/Not Likely to be Earned

This is another point where the cap isn’t necessarily about money earned in that particular season. Per-game roster bonuses and incentives are either likely to be earned or not likely to be earned.

If they were earned the season prior, they are deemed likely to be earned, and if not, they are deemed not likely to be earned.

LTBE incentives either count in full on a particular season or don’t count at all. Per-game roster bonuses can partially count against the cap.

Looking at the $1 million example from before:
Let’s say a player was active for 15 games the prior season and has that per-game roster bonus. The $1 million would not completely count against the cap. 15 games would be LTBE, and two games would be NLTBE. So, the 15 LTBE games would count against the cap that season, and two would not.

If the player is active in more or fewer than 15 games, any additional spending would be accounted for in an adjustment to the following season’s cap. Fewer than 15 games would result in a credit, while more would lead to losing cap space.

In the end, every dollar spent on a player counts against the cap at some point, and all cap dollars that are accounted for that aren’t spent do get debited back to the cap space. The NFL salary cap is just an accounting tool for a particular season. It’s not the cash spent in a particular season.