https://www.nrl.com/nrlhq/referencecentre/salarycap/tabid/10434/default.aspx
SALARY CAP BREAKDOWN
NRL PAYMENTS FOR THE TOP 25
$6.1 million - Basic payments for the Top 25 players including Sponsor Servicing Allowance ($200k) which is automatically given to all clubs to compensate players for club sponsorship activities including appearances and endorsements.
Also included is a Long Serving Player Allowance ($300K) per Club for eligible players who have played more than six continuous years of grade football with that club including Holden Cup and NSW Cup.
+ $243,750 per team - Paid by the NRL to the RLPA towards players' Retirement Account Contribution.
+ $100,000 per team - Paid by the NRL to the RLPA towards their administration funding.
*Payments under the actual salary cap total $6.30 million paid directly by clubs across the Top 25 players. The additional $343,750 paid into the RLPA Retirement and Administration Fund Contribution is not defined as a salary cap payment.
What players can earn outside the salary cap:
$600,000 - Marquee Player Allowance - any or all of the Top 25 players at each club can share in payments made by club sponsors seeking to use a player's intellectual property. These may be guaranteed in the playing contract by clubs.
$100,000 - Motor Vehicle Allowance – a maximum amount of five motor vehicles may be provided to players in the Top 25 outside of the salary cap. (Valued at $20,000 each).
Unlimited - Players can earn unlimited amounts from corporate sponsors who are not associated with the club and who do not use the game's intellectual property (no club logos, jerseys or emblems) provided these are pre-approved. These agreements may not be negotiated by the club as an incentive for a player to sign a contract, nor can they be guaranteed by the club.
Unlimited - Tertiary education fees, approved traineeships, medical insurance costs, relocation/temporary accommodation costs are not included in the cap but must be approved.
Payments for players outside Top 25
$460,000 - Cap for all players outside of the top 25 who compete in the Telstra Premiership.
HOLDEN CUP: PAYMENTS FOR THE TOP 20
$250,000 - Basic payments for the Top 20 players.
What Holden Cup players can earn outside the salary cap:
$31,500 - School fees allowance per club.
Unlimited - Approved living away from home allowance (up to $8,190 per annum per Holden Cup qualified player outside the Top 25).
Unlimited - Tertiary education, approved traineeships, apprenticeship allowances, medical insurance costs, relocation/temporary accommodation costs.
Payments for Holden Cup players outside the top 20
$50,000 - Cap for all players outside of the Top 20 who compete in Holden Cup.
Please note: Players outside the Top 25 who do not compete in the NRL or Holden Cup, are not subject to the Salary Cap.
FREQUENTLY ASKED QUESTIONS
NRL Clubs work on a salary cap of up to $6.1 million across their Top 25 players but it is important to note the effective spend for each club is estimated at $7.5 million each year, which includes the NRL, NRL Holden Cup U20s, second-tier payments, over-age and elite junior competitions, marquee player allowances and third-party motor vehicle allowances.
Why have a Salary Cap?
The NRL Salary Cap serves two functions:
- It assists in "spreading the playing talent" so that a few better resourced clubs cannot simply out-bid other clubs for all of the best players. If a few clubs are able to spend unlimited funds it will reduce the attraction of games to fans, sponsors and media partners due to an uneven competition. Allowing clubs to spend an unlimited amount on players would drive some clubs out of the competition as they would struggle to match the prices wealthy clubs could afford to pay.
- It ensures clubs are not put into a position where they are forced to spend more money than they can afford, in terms of player payments, just to be competitive.
Where did it come from?
Salary caps have been part of sport for many years. The NSWRL first introduced a salary cap to Rugby League in 1990 and the NRL has had a salary cap since its inception in 1998.
The AFL introduced a salary cap in 1985 and major overseas sports such as the NFL and NBA in the USA also use salary caps.
How much can clubs spend?
The Salary Cap for 2015 is $6.1m for the 25 highest remunerated players at each club. All other players that play NRL in the current year must fit under a $460,000 Salary Cap.
For players in the Top 25 Salary Cap or 2nd Tier Salary Cap, the Salary Cap value for a player each year is broken down into the following categories:
- Playing Fee – fully included in the Salary Cap.
- Included benefits – all benefits provided to players including accommodation, travel, motor vehicles, interest free loans and manager's fees and any applicable fringe benefits tax.
- Win bonuses and appearance fees – Payments for appearing in or winning a game are calculated based on the number of NRL games the player played in the prior year multiplied by any applicable bonuses. For win bonuses, the calculation is capped at 13 wins. Example: A player appeared in 10 NRL games in 2015 and now has a 2016 Contract for $100,000 contract fee plus $1,000 per game. His - Salary Cap Value would be $100,000 plus 10 times $1000 = $110,000.
- Other bonuses – Any other bonus contained in a player's contract will be calculated in the Salary Cap if the NRL Salary Cap Auditor expects him to achieve the bonus based on his prior year's performance.
Example: A player played State of Origin in 2015. His 2016 Contract includes a $20,000 State of Origin bonus. This bonus will be included in the player's 2016 Salary Cap Value.
Note: Where a bonus is achieved by a player but was not assessed in the player's Salary Cap Value, the bonus is carried forward and calculated in the player's Salary Cap Value for the following year.
Is any remuneration excluded?
In addition to allowances, the following benefits to players are excluded:
- Tertiary education (TAFE and university).
- Approved Traineeships.
- Medical insurance costs.
- Relocation and temporary accommodation costs.
- Payments from representative games and events such as All Stars.
- Prize money
- In addition to the Top 25 Salary Cap, clubs will have a maximum limit of $250,000 to spend on the 20 highest remunerated players who do not form part of the top 25 salary cap and who qualify for the Holden Cup (turning 20 or less in the current year). All other players who play in the Holden Cup must fit under a 2nd Tier Cap of $50,000.
- For players in the Top 20 Holden Cup Salary Cap, the Salary Cap value for a player each year is broken down into the following categories:
- Playing Fee – fully included in the Salary Cap
- Included benefits – all benefits provided to players including accommodation and travel (that are in excess of the allowed excluded amounts per player), motor vehicles, interest free loans and manager's fees and any applicable fringe benefits tax.
- Win bonuses and appearance fees – Payments for appearing in or winning a game are calculated based on the number of NRL and Holden Cup games the player played in the prior year multiplied by any applicable bonuses. For win bonuses, the calculation is capped at 13 wins.
- Example: A Holden Cup eligible player appeared in 10 Holden Cup games in 2014 and now has a 2015 contract for a $10,000 contract fee plus $500 per game. His Salary Cap Value would be $10,000 plus 10 times $500 = $15,000.
- Other bonuses – Any other bonus contained in a player's contract will be calculated in the Holden Cup Salary Cap if the Salary Cap Auditor expects him to achieve the bonus based on his prior year's performance.
Example: A player played U20s for NSW in 2014. His 2015 Contract includes a $2000 U20s NSW bonus. This bonus will be included in the player's 2015 Holden Cup Salary Cap Value.
Note: Where a bonus is achieved by a player but was not assessed in the player's Salary Cap Value, the bonus is carried forward and calculated in the player's Salary Cap Value for the following year.
The NRL also excludes the following player allowances from the Salary Cap to encourage clubs to invest in career development and welfare for players in the Holden Cup:
- Up to $15,750 per player for Tertiary education (TAFE and university).
- Up to the award rate for Approved Traineeships.
- Up to $15,750 per player towards an approved apprenticeship or pre-apprenticeship program.
- Up to $2,500 per player as an education Completion Bonus each year.
- Up to $8,190 per annum in living away from home allowances.
- Medical insurance costs.
- Relocation and temporary accommodation costs.
- One return welfare flight back home per player each year for relocated players.
Are there any allowances?
The only allowance a club may use to pay players outside of the Holden Cup Salary Cap is an allowance of up to $31,500 across the Top 20 Holden Cup players for secondary education.
What about money paid from other people or companies?
If a player is receiving money from any person as a way of inducing him to play for the club, then that money will be included in the Salary Cap.
Income that a player earns from parties not related to his club is generally not included in the Salary Cap, however, the details of the agreement must be advised to the club by the player.
The club must then get approval for the agreement from the Salary Cap Auditor in order for the remuneration to be excluded.
In 2006, the NRL also introduced an allowance for players who enter into Third Party Agreements with club sponsors, referred to as Marquee Player Agreements. In 2014, the Top 25 players are allowed to earn up to a maximum $600,000 in Marquee Player Agreements but the total payments under these agreements must not exceed $600,000 per club, otherwise any excess amounts are included in the salary cap.
Players are also able to enter into agreements with game sponsors, referred to as Sponsor Leveraging Agreements. There is no maximum amount and they are excluded from the salary cap.
How can some clubs have so many elite players and still be under the Salary Cap while other clubs at the bottom of the table seem to be just under the Salary Cap?
The reality is the majority of clubs spend the Salary Cap but not all are successful on the field. Someone has to come last and someone has to win, regardless of what they spend.
Some clubs will attract players on the basis of what the club can offer a player's career rather than just money. Other clubs may need to spend more money to attract the same level of player.
Many factors affect individual players' remuneration levels. Some of the reasons why a player may sign with a club include:
- Staying close to the player's home town and family.
- The chance to work with one of the top coaches in the game.
- Being part of a winning team and the potential to play in the Telstra Premiership Finals Series or Grand Final.
- Increased opportunity to play NRL with that club due to a lack of competition for the player's preferred position.
- The increased profile a player may enjoy in a one-team town.
- The number of support staff, their expertise and the support facilities.
- Education and welfare support structures.
- In addition, a player's salary package may include benefits that are specifically excluded from the Salary Cap, such as the payment of medical premiums, Marquee Player Agreements, relocation payments, prize money, university fees etc.
How does the Salary Cap Auditor monitor the Salary Cap?
All NRL player contracts must be lodged with the Salary Cap Auditor. These contracts are reviewed and each player's remuneration is included in the Salary Cap.
In addition, the CEO and Chairman of each club must provide a statutory declaration to the NRL at the beginning and end of each season in support of the club's Salary Cap calculation.
The Salary Cap Auditor monitors each club's Salary Cap position throughout the year based on the information provided by clubs. In addition, the Salary Cap Auditor may perform investigations into the remuneration of players if discrepancies arise. These investigations usually involve the club and its associated entities and cover all payments made and agreements entered into that may result in benefits being provided to players.
The Salary Cap Auditor also continually monitors media reports and makes enquiries in an effort to uncover any information that may have Salary Cap implications.
When clubs have been found to either breach the Salary Cap or have made undisclosed payments to a player, then the club is issued with a breach notice.
Third Party Agreements
Third party agreements are payments made by companies directly to players. There is no restriction on the amount a player can earn through third party agreements where he is being paid for his own intellectual property, without the need to employ club logos or names and where the company involved is neither a club sponsor nor are they acting on behalf of a club to secure the player's services. An example of this is a player promoting a brand or product, for example, Billy Slater and Australian Bananas.
Many players have third party agreements that are outside the salary cap. Individual players registered third party agreements totaling in excess of $15 million in 2015.
All third party agreements must be registered and approved beforehand. This is to ensure that they do not become a way for clubs or players to use sponsors or third parties to undermine the salary cap and also for the game to ensure the protection of club and game intellectual property. There are provisions for club sponsors to enter into agreements with elite players under the Marquee Player Agreement allowance.
Why do clubs have to let players go after they have been successful?
The value of a player rises as his skills and standing in the game improves and as more clubs compete for his services. The Salary Cap does not prevent a club retaining a senior player but it does mean that a club must choose a balance between retaining established stars and buying new players. This ensures a distribution of playing talent across the game. It is important to remember that the Cap does include a long serving player allowance to assist in this balance.
SALARY CAP HISTORY
Salary Cap Timeline
1990 NSWRL introduces a Salary Cap ranging from $800,000 to $1.5m depending on individual club circumstances.
1991 NSWRL lifts Salary Cap to $1.6m.
1994 NSWRL approves rise in maximum Salary Cap to $1.8m.
1997 Super League war. No Salary Cap in place.
1998 NRL formed and proposes a $3.25m Salary Cap for 1999. Cap acknowledges "notional values" of players from contracts signed during the Super League war.
1999 NRL Club Chief Executives, Chairmen and NRL Board recommend retention of the $3.25m Salary Cap for next two seasons.
2000 NRL provides guidelines for breaches of the Salary Cap including fines and the loss of competition points for breaches from 2001 and beyond. The Sponsor Servicing Allowance was introduced lifting the effective Salary Cap from $3.25m to $3.325m.
2001 Sponsor Servicing Allowance further increased lifting the effective Salary Cap to $3.347m.
2002 Clubs which could increase overall sponsorships were provided with an extension of the Sponsor Servicing Allowance, bringing the total available allowance to $200,000 and an effective Salary Cap of $3.45m.
2003 Long Serving Player Allowance introduced to encourage clubs to retain players who have served a continuous period of ten years in first grade. This $100,000 allowance lifted the effective cap to $3.55m.
2004 The NRL and RLPA agree via a Collective Bargaining Agreement that the Salary Cap for 2005 will be $3.3m and $3.366m for 2006.
2005 The Salary Cap rises to $3.3 million with a total effective Salary Cap of $3.6 million (including Long Serving Player Allowance and Sponsor Servicing Allowance).
2006 A heads of agreement for a four-year Collective Bargaining Agreement was signed in June for seasons 2007-10. The agreement provided for:
- A$3.9m salary cap in 2007 – up from $3.366million.
- Minimum wages of $55,000 (players numbered 1-17) and $50,000 (players numbered 18-25) – up from $37,500 in 2006.
- Origin payments increasing to $12,500 per game.
- Increases in Third Party Sponsorship Agreements to $150,000.
- Reduction in qualifying period for veteran players from 10 to 8 years under Long Serving Player Allowance.
- $100,000 for the RLPA retirement fund and towards RLPA contributions.
2007 A further $100,000 increase to the salary cap was agreed to by the NRL and RLPA bringing the total salary cap to $4m for 2008.
2007 Minimum wages of $55,000 (players numbered 1-17) and $52,500 (players numbered 18-25) – up from $50,000.
2008 Introduction of the Holden Cup Competition with a Salary Cap of $250,000.
2011 Minimum wages increased to $60,000 (players numbered 1-17) and $55,000 (players numbered 18-25).
2012 A lift in the salary Cap of $100,000 to $4.4m.
2013 A heads of agreement for a five-year Collective Bargaining Agreement was signed in June for seasons 2013-17. The agreement provided for:
- A $5.150million salary cap in 2013 – up from $4.4million
- Minimum wages in 2013 of $75,000 – up from $55,000 in 2012
- Origin payments increasing to $30,000 per game
- Increases in Marquee Player Agreements of $250,000 to $550,000
- Increase of $170,000 to $225,000 for each club towards the RLPA Retirement Fund, made up of $9,000 increase per player in Top 25 increasing in equal installments reaching $10,000 by 2017
- Players outside Top 25 who play 4 or more NRL games also entitled to retirement account contribution of $9,000 per annum
- Test Match increases: $20,000 per player
- Four Nations increases: $50,000 (1st), $40,000 (2nd), $30,000 (3rd)
- World Cup increases: $50,000 (1st), $40,000 (2nd), $30,000 (3rd)
- 2014 - A $5.5million salary cap in 2014
- Minimum wages in 2013 of $77,500 – up from $55,000 in 2012 ($75,000 in 2013).
- Origin payments increasing to $30,000 per game
- Increases in Marquee Player Agreements of $300,000 to $600,000 ($550,000 in 2013)
- Increase of $151,250 to $231,000 for each club towards the RLPA Retirement Fund, made up of $9,250 per player in Top 25 increasing in equal installments reaching $10,000 by 2017
- Players outside Top 25 who play 4 or more NRL games also entitled to retirement account contribution of $9,250 per annum
- Test Match increases: $20,000 per player
- Four Nations increases: $50,000 (1st), $40,000 (2nd), $30,000 (3rd)
- World Cup increases: $50,000 (1st), $40,000 (2nd), $30,000 (3rd)
2015 A $5.8million salary cap in 2015:
- Minimum wages in 2015 of $80,000 – up from $55,000 in 2012 ($77,500 in 2014).
- Increase to $237,500 for each club towards the RLPA Retirement Fund, made up of $9,500 per player in Top 25
- Players outside Top 25 who play 4 or more NRL games also entitled to retirement account contribution of $9,500 per annum
2016 A $6.1million salary cap in 2016:
- Minimum wages in 2016 of $82,500 – up from $55,000 in 2012 ($77,500 in 2014, $80,000 in 2015).
- Increase to $243,750 for each club towards the RLPA Retirement Fund, made up of $9,750 per player in Top 25
- Players outside Top 25 who play 4 or more NRL games also entitled to retirement account contribution of $9,750 per annum
Last updated 3 November 2015
