NHL Salary Cap Explained (2024–25)

What is the NHL Salary Cap?

The NHL salary cap is a limit on the total amount each NHL team can spend on player salaries. It’s a hard cap system, meaning teams cannot exceed the cap ceiling (upper limit) during the season. Every team must also meet a minimum spending requirement known as the cap floor (lower limit).

The salary cap was introduced after the 2004–05 lockout to ensure cost certainty and competitive balance across the league. Prior to its implementation, the NHL was the only major North American league without a salary cap or luxury tax.

The cap’s introduction forced high-spending teams to curb payrolls and gave smaller-market teams a better chance to compete. In simple terms, the NHL salary cap creates a more level playing field by tying team payrolls to league revenues. As league revenue grows, the cap increases; if revenue stagnates or drops, the cap can flatten or even decrease (as it did in 2013 after a lockout agreement). The cap system is outlined in the NHL’s Collective Bargaining Agreement (CBA) and is strictly enforced by the league.

How the NHL Salary Cap Works

The NHL salary cap is recalculated each year based on league revenue. Under the CBA, players and owners split Hockey Related Revenue roughly 50-50, and the cap (and floor) are adjusted accordingly. In practical terms, the league projects its revenues for the upcoming season and sets an Upper Limit (the cap ceiling) and a Lower Limit (the floor) for team payrolls. For example, if revenues rise, the cap goes up; if revenues fall, the cap could stay flat or decline. (During the COVID-19 pandemic, revenues dropped and the cap was held flat for multiple years.)

Midpoint and Floor:

The CBA defines a midpoint payroll, and the cap ceiling is a certain percentage above that midpoint while the floor is the same percentage below. Since 2013, the cap ceiling and floor have been set 15% above and below the midpoint, respectively. This means the range between the maximum and minimum team payrolls grows proportionally with the midpoint. In 2024–25, for instance, the midpoint is $76.5 million, yielding a ceiling of $88 million and a floor of $65 million. All teams must spend between those two limits over the course of the season.

In-Season Compliance:

Teams must be cap-compliant (i.e. at or below the cap ceiling) at all times during the regular season. Typically, teams are allowed to carry a 23-player active roster, and the combined cap hits of those players cannot exceed the cap ceiling. The cap is managed on a daily basis – each day of the season, a portion of each player’s cap hit counts against the team’s cap. If a team spends less than the cap on a given day, it accumulates cap space that can be used later in the season (this is why teams often bank cap space for trade deadline acquisitions). Conversely, a team right at the ceiling has no flexibility until it frees up money via moves like trades, waivers, or injuries.

Roster & Exceptions:

Certain scenarios provide flexibility. During the offseason (summer), teams are allowed to exceed the cap by up to 10%, but they must be back under the ceiling by the start of the regular season. Additionally, there are mechanisms like long-term injured reserve (LTIR) that can provide cap relief for replacing injured players (explained more in Cap Rules below). However, outside of those exceptions, the NHL salary cap is rigid – there is no luxury tax system as in the NBA or MLB. Teams that violate the cap face severe penalties, so every transaction (trades, free agent signings, call-ups, etc.) is evaluated for its cap impact. General managers employ entire staff and use tools (like our CapWages trackers) to monitor their team’s cap status daily.

2024–25 NHL Salary Cap Figures and Limits

For the 2024–25 NHL season, the league’s salary cap limits are as follows:

• Upper Limit (Cap Ceiling): $88.0 million
• Lower Limit (Cap Floor): $65.0 million
• Midpoint: $76.5 million

These figures represent a significant increase from recent years. The $88.0M cap ceiling is a $4.5 million jump from the $83.5M upper limit in 2023–24 – the largest single-year increase in the cap since 2018–19. The cap had been relatively flat in the preceding seasons (remaining at $81.5M from 2019 through 2021, then nudging up to $82.5M and $83.5M) due to the pandemic’s impact on revenue. With revenues rebounding and the players’ escrow debt from the COVID years fully repaid, the league is now seeing a healthier rise in the cap.

The $65.0M cap floor in 2024–25 also climbed substantially, forcing the lower-spending teams to increase payroll. For context, the floor was $61.7M in 2023–24, so teams must now spend at least $3.3M more than last year to reach the minimum. Teams like the Arizona Coyotes (who often operated near the floor) took on additional contracts to ensure they meet this requirement. On the other end, several contenders are right up against the $88M ceiling, leaving them with minimal cap space. (You can check each team’s current cap space on the CapWages Team Salary Tracker, which updates daily). Overall, an $88 million ceiling gives teams a bit more breathing room to sign players, but it also means star players are commanding higher salaries as the upper limit rises.

Looking ahead, the NHL salary cap is projected to continue rising in coming seasons. League and NHLPA officials have signaled that the cap could reach the mid-$90 millions by 2025–26 and continue climbing as revenue grows (see Related News at the end for projections). For now, $88.0M is the operative number - a new record high for the NHL cap.

NHL Salary Cap Rules & Exceptions: Cap Hits, LTIR, and More

Managing the salary cap involves understanding several key rules and exceptions. Below are the core concepts and special cases that both casual fans and cap gurus should know:

Cap Hits: Under NHL cap hit rules, a player’s cap hit is usually the average annual value (AAV) of his contract. This means multi-year contracts are averaged for cap purposes – a 5-year, $50 million deal carries a $10 million cap hit each year, even if the salary is not paid evenly each season. Cap hits include base salary plus signing bonuses, divided by the contract term. (Teams can’t game the system by front-loading or back-loading deals to reduce cap hit – any structure is averaged out.) There is also an upper limit on individual player cap hits: no single player’s cap hit can exceed 20% of the total team cap at the time of signing. For 2024–25, this individual cap maximum is $17.6 million. (In practice, no player is near that number yet – the highest cap hit in 2024–25 is $16.7M for Auston Matthews.) You can find every NHL player’s contract details and cap hit in our CapWages Player Contracts database.

Long-Term Injured Reserve (LTIR): If a player is seriously injured and expected to miss at least 10 games and 24 days, a team can place him on LTIR. This provides cap relief – essentially, the team is allowed to exceed the cap by the amount of the injured player’s cap hit in order to replace him. For example, if a team has a player with a $5M cap hit on LTIR, they can call up replacements or acquire players up to an additional $5M beyond the normal cap ceiling. However, LTIR comes with strings attached. Teams must already be at or near the cap to use LTIR (you don’t get the relief unless you need it), and using LTIR means you stop accruing daily cap space. Also, when the player is ready to return, the team must fit his cap hit back under the cap – this sometimes forces teams to make trades or send other players down. LTIR has been infamously used as a strategic loophole: because the salary cap does not apply during the playoffs, teams have occasionally kept players on LTIR for the rest of the regular season and activated them in the postseason when there’s no cap. (The 2021 Tampa Bay Lightning did this with Nikita Kucherov's contract, drawing the ire of other fans – but it was within the rules.)

Performance Bonuses: Certain contracts (usually entry-level deals for young players, or 35+ aged veterans on one-year deals) include performance bonuses that can be earned by hitting milestones (e.g., goals, awards, playoff rounds). These bonuses can potentially push a team’s actual payroll over the cap in a given year because the bonuses aren’t counted until earned. The NHL allows teams to exceed the cap with bonuses during the season, but if a team ends up over the cap due to earned bonuses, the excess amount carries over as a cap charge the next season. This is called a bonus overage. For example, if a team exceeded the cap by $1.2M due to performance bonuses in 2023–24, then $1.2M will be deducted from their cap space in 2024–25. Teams try to budget for potential bonuses to avoid a large overage, but unexpected breakouts (or a bonus-laden contract) can lead to a penalty the following year.

Retained Salary Transactions (Trades): The NHL allows teams to retain (hold back) part of a player’s salary/cap hit when trading him to another team. This rule, introduced in 2013, facilitates trades by letting the original team pay a portion of the contract to make the cap hit more palatable for the acquiring team. The key points: a team can retain up to 50% of a player’s cap hit/salary in a trade, and can do this for a maximum of three players at a time on their payroll. The retained amount counts against the original team’s cap, while the new team only incurs the reduced cap hit. For instance, if a player has a $6M cap hit, his team could trade him and keep $3M on their books, so the acquiring team only has a $3M hit. Retaining salary is often used to move expensive veterans or to make three-team trade scenarios work (with one team eating part of the cap hit as a middleman). It’s important to note that once a salary is retained, that cap hit is dead space for the retaining team even if the player retires or his contract expires. Teams cannot shed that retained cap hit except via a buyout (and even then some portion remains). Retained salary trades have become a common strategy for contenders loading up at the trade deadline while staying under the cap.

Contract Buyouts: NHL teams may buy out a player’s contract to terminate it early, but they must pay the player a portion of the remaining salary and take a cap hit for several years as a consequence. A standard buyout costs a team two-thirds of the remaining salary (or one-third if the player is under 26) and the payout is spread over double the remaining term of the contract. The cap hit from a buyout is similarly spread over twice the term, and it’s lower than the original hit in each of those years. In short, a buyout saves cap space in the short run at the expense of extending a (reduced) cap hit into future years. For example, suppose a player has 1 year at $4 million remaining. Buying him out would cost $2.67 million (two-thirds of $4M) paid over 2 years, and the cap hits might be roughly $1.33M in each of the next two seasons instead of $4M in one season. Buyouts give teams a second chance if they made a mistake on a contract or if a player is no longer fit, but the downside is “dead cap” lingering on the books. (During the 2013 compliance buyout period, teams were allowed penalty-free buyouts to amnesty bad contracts from before the new CBA – but those were a one-time exception.)

Buried Contracts (Minors Demotion): If a player is on a one-way NHL contract and is reassigned to the AHL (minors), the team receives limited cap relief. A portion of that player’s cap hit – equal to the league minimum salary plus $375,000 – does not count against the cap while the player is in the minors. Any remaining cap hit above that amount does count. In recent years, this “buried” threshold has been around $1.15 million. For example, if a player with a $2M cap hit is buried in the AHL, the team still carries roughly $0.85M of his cap hit on the NHL books (because $2M – $1.15M = $0.85M). This rule prevents teams from completely hiding large contracts in the minors to escape the cap hit. Essentially, you can bury a moderate contract, but big-money deals will still mostly count. Most often, this is used for overpaid veterans who get waived and sent down – the team saves a bit of cap space but not the full amount. (If the player is loaned to a European league or otherwise leaves, similar rules apply – the cap hit can be reduced but not fully gone unless there’s a mutual contract termination.)

No Cap in Playoffs: A crucial footnote to remember is that the salary cap is only in effect during the regular season. There is no salary cap in the Stanley Cup playoffs. Once the regular season ends, teams can exceed the cap – which is why you’ll sometimes see a player on LTIR come back for Game 1 of the playoffs, even if his cap hit wouldn’t have fit in the regular season lineup. In the playoffs, teams can use any players under contract without regard to the cap (only the 23-man roster limit and other roster rules are lifted or altered). This allows teams to field their absolute best lineup in pursuit of the Cup. However, the spirit of the cap still influences roster construction; very few teams intentionally try to “game” the system because you have to make the playoffs first without exceeding the cap in the regular season. The Tampa Bay example mentioned above highlights how the no-cap-playoffs rule can be leveraged. The NHL has not moved to institute a playoff cap, but the topic comes up whenever a team appears to benefit from stashing salary during the season. For now, it remains a quirk (and sometimes controversial aspect) of NHL cap management.

Each of these rules adds complexity to how teams handle their rosters. Successful teams often employ cap specialists and use tools like CapWages to simulate transactions before making moves. For fans, understanding these nuances can greatly enhance your appreciation of the chess match that is an NHL front office managing the cap. The NHL salary cap system rewards careful planning, creativity, and sometimes a bit of crafty maneuvering within the rulebook’s allowances.

NHL Salary Cap History (2005–2025)

The NHL salary cap has changed markedly since its first season in 2005–06. Initially set at $39 million (ceiling) with a $23 million floor, the cap has generally increased every year as league revenues grew. The only exception was in 2013, when a new CBA lowered the cap from $70.2M (pro-rated for the lockout-shortened 2012–13 season) down to $64.3M in 2013–14. This drop was a one-time correction after the 2012 lockout; from that point on, the cap resumed its upward trajectory. Early growth was rapid. From 2005 to 2012, the cap ceiling rose from $39M to $64.3M – about a 65% increase – while the cap floor jumped by over 110% in the same span, putting pressure on smaller-market teams to keep up. The 2013 CBA addressed this by changing the ceiling/floor calculation to a percentage-based system (±15% of midpoint), ensuring the floor grows in lockstep with the cap. Since then, the cap has seen steady climbs, crossing the $70M mark in 2015–16 and the $80M mark by 2018–19. Below is a table of the NHL’s salary cap limits by season, illustrating how the upper and lower limits have evolved:

NHL Salary Cap History (2005–2025): Cap Ceiling and Floor by Season

**(Note: 2012–13 was a lockout-shortened season; teams operated under a pro-rated $70.2M cap for the partial season, then the new CBA reset the cap lower for 2013–14.)

Several trends emerge from this history. The cap grew quickly in the first few years as the NHL’s post-lockout revenues surged (thanks to new TV deals, a Canadian dollar upswing, and more). The cap ceiling first surpassed $50M in 2007–08, reached $60M by 2011, and hit $70M in 2015–16. By 2018–19 the cap was $79.5M, reflecting over a decade of revenue growth. Then came the COVID-19 pandemic in 2020, which froze the cap at $81.5M for three straight seasons (2019–20 through 2021–22) as the league’s income took a hit. The small increases in 2022–23 ($82.5M) and 2023–24 ($83.5M) were signs of recovery, but it wasn’t until 2024–25 that the cap took a significant jump again to $88M.

On the lower end, the cap floor has forced teams to spend more each year. The minimum payroll rose from $23M in 2005 to $48.3M by 2011–12, and it has continued to climb into the $60M+ range in recent years. In fact, the 2024–25 floor ($65M) is nearly as high as the cap ceiling was in 2011–12 ($64.3M). This underscores how much league revenues (and player salaries) have grown. Small-market or rebuilding teams often take on contracts or sign veterans largely to reach the floor – for instance, the floor jump in 2018–19 to $58.8M prompted some rebuilding teams to add salary they didn’t necessarily need, just to comply.

Historically, whenever the cap makes a big jump, it has league-wide effects: players negotiate richer contracts, and teams adjust their roster strategies. Conversely, when the cap flattened around $81.5M, many teams experienced cap crunches, leading to creative moves (like long-term injured reserve usage, back-diving contracts before they were outlawed, and front-loaded deals for stars to lower AAV). The 2013 CBA added mechanisms (term limits on contracts, cap recapture penalties for early retirement, etc.) to prevent circumvention and to keep the cap system working as intended.

As of 2024–25, the cap’s overall growth since 2005 is substantial – the $88M cap is roughly 2.25 times the original $39M cap. The floor has increased even more, nearly threefold from $23M to $65M. This mirrors the growth in NHL revenue and also the increased parity in the league: today, even the lowest-spending teams must invest in their rosters at a level that would have been unthinkable pre-2005. Fans have become accustomed to tracking each offseason how much the cap will rise, as it directly impacts what moves their favorite team can make.

Going forward, recent agreements between the NHL and NHLPA have provided a multi-year cap outlook: the cap is projected to hit $95+ million in the next couple of seasons and could exceed $100M by 2026–27 if revenue targets are met. (Those numbers assume no further labor interruptions and continued revenue growth from media rights, expansion, etc.) The NHL salary cap history is thus a story of growth – some of it smooth, some of it abrupt. For fans, keeping an eye on these numbers is crucial, as the cap influences everything from blockbuster trades to Stanley Cup dynasties.

Frequently Asked Questions about the NHL Salary Cap

Q: How does the NHL salary cap work?

A: The NHL salary cap works by setting an upper limit on each team’s allowed payroll, tied to league revenues. Each season, the league announces a cap ceiling (maximum team salary) and floor (minimum team salary) that teams must adhere to. Teams calculate their cap hit total (the sum of all player cap hits on the roster) and must keep that at or below the cap ceiling all season (aside from allowed exceptions like injured reserve). If a team’s cap hits would exceed the ceiling, they have to make roster moves (trades, demotions, etc.) to get back under the cap. The cap is a “hard cap,” so there is no option to pay a tax to go over – teams simply cannot go above the limit, which keeps all teams’ spending in check relative to league revenue.

Q: What is the NHL salary cap for the 2024–25 season?

A: For the 2024–25 season, the NHL salary cap upper limit is $88 million. The corresponding lower limit (cap floor) is $65 million. This means every team’s payroll must fall between $65M and $88M for the 2024–25 season. The $88M cap is an increase from the $83.5M limit in 2023–24, reflecting the league’s higher revenues.

Q: Can an NHL team exceed the salary cap?

A: Teams are not allowed to exceed the salary cap during the regular season (it’s a hard cap). However, there are a couple of scenarios where being over the cap can technically happen within the rules. One is the offseason: in the summer, teams can exceed the cap by up to 10%, but they must be back under the cap by the start of the season. The other is when using Long-Term Injured Reserve (LTIR) – if a player is on LTIR, a team can exceed the cap to replace that player (up to the amount of the injured player’s cap hit). This isn’t free cap space; it’s a temporary exception for as long as the player remains injured. Aside from those cases, a team cannot play games while over the cap. If a team somehow ended up over the cap (say, due to bonus overages or a mistake in roster submission), the league would force immediate compliance (for example, voiding the activation of a player or imposing other penalties) to ensure the team gets under the cap. In practice, teams monitor their cap daily to prevent this situation. Important: There is no salary cap during the playoffs, so teams can exceed the cap in the postseason – but they have to be cap-compliant up to the last day of the regular season.

Q: What is a “cap hit” in the NHL?

A: A cap hit is the value of a player’s contract that counts against the team’s salary cap. For most contracts, the cap hit is equivalent to the contract’s average annual value (total money divided by years). For example, if a player signs a 4-year deal worth $20 million, his cap hit is $5 million per year, regardless of the actual salary each season. Some contracts have signing bonuses or varying yearly salaries, but the cap hit evens those out across the term. The concept of the cap hit is used so that teams can’t circumvent the cap by front-loading or back-loading contracts – whatever the structure, the team is charged the average amount each year. (One exception: if a player has performance bonuses, those don’t count toward the cap hit initially – they’re accounted for separately as explained below.) In summary, when you hear “Player X has a $7M cap hit,” it means $7 million of the team’s cap space is occupied by that player’s contract.

Q: How do performance bonuses affect the salary cap?

A: Performance bonuses can temporarily allow a team to exceed the cap, but any excess will be charged later as a bonus overage. Here’s how it works: if a player earns a bonus that pushes the team over the cap in that season, the overage amount is carried over and deducted from the team’s cap space in the following season. Teams can exceed the cap during the season only by the amount of potential bonuses earned. For example, if a team is right at the $88M cap but has a player with a $1M bonus for hitting 30 goals, and he does hit that bonus, the team would finish the season $1M over the cap. That $1M then gets added as a penalty to their cap for 2025–26 (effectively reducing their available cap by $1M next year). If the team has cap space available at the end of the season, that space can absorb the bonuses; but if not, the overage rolls over. In short, performance bonuses don’t count against the cap until earned, and the league gives a one-year grace period via the overage system. Teams try to plan for this by leaving a buffer if they have many bonuses on the roster.

Q: How do buyouts affect the salary cap?

A: When a team buys out a player’s contract, it doesn’t wipe the cap hit completely – instead, a reduced cap hit is spread over a longer period. The standard formula is: a buyout costs the team two-thirds of the player’s remaining salary (or one-third if the player is under 26), paid out over twice the remaining length of the contract, and the cap hit is adjusted accordingly. The result is usually that the team gets some immediate cap relief but incurs smaller cap hits for additional years. For example, suppose a player has 2 years left at a $6M cap hit. Buying him out (if he’s over 26) means the team will pay him 2/3 of $12M = $8M, over 4 years. The cap hits are calculated by a formula, but generally the team might end up with around a $2M cap hit for 4 years instead of $6M for 2 years. The first year or two of the buyout often have an even lower cap hit (giving more relief when the team needs it), and later years have a bit higher (but by then the cap may have risen). So buyouts are a trade-off: they save cap space in the short term, at the cost of “dead” cap charges in future seasons. Teams resort to buyouts if a player’s performance no longer justifies his cap hit and they can’t trade the contract. It’s essentially an expensive mulligan on a contract. Fans can track all current buyouts and their cap charges on cap tracking websites – it’s not unusual to see teams still carrying buyout cap hits from players who haven’t been on the team for a few years.

Related NHL Salary Cap News & Updates

• January 31, 2025: NHL, NHLPA Set Future Salary Cap Increases – Cap Projected to Reach $113.5M by 2027–28. The League and Players’ Association announced a multi-year agreement for predictable cap growth. The NHL salary cap will jump to $95.5 million in 2025–26 (with a $70.6M floor), then $104M in 2026–27, and $113.5M in 2027–28. These figures are higher than earlier projections and underscore confidence in revenue growth. (The plan is subject to the CBA remaining in effect through those years.)

• December 10, 2024: Commissioner Bettman Hints Cap Could Exceed $92M in 2025–26. At the NHL Board of Governors meeting, Gary Bettman projected a ~$92.4M salary cap for 2025–26 under the current escrow and revenue trends, with potential to go even higher pending negotiations. This comment came before the formal NHL/NHLPA agreement, indicating optimism that the cap might rise more than initially expected if revenues stay robust.

• June 8, 2024: NHL Salary Cap Rises to $88M for 2024–25, Largest Jump in Years. The NHL and NHLPA officially set the 2024–25 cap at $88.0 million (floor $65.0M), a $4.5M increase from the previous season. This is the biggest year-over-year cap increase since 2018–19, marking the end of the flat-cap era that followed the pandemic. The League cited a significant revenue rebound – including record 2023–24 attendance and a new Canadian TV deal in the works – as key factors. Teams immediately began adjusting, with many clubs using the extra space to sign free agents or extend star players over the summer.

Last updated: May 2025: (This NHL salary cap reference page is updated regularly to reflect the latest figures and news. Be sure to check back for new developments as the league’s financial landscape evolves.)