The Salary Cap

NRL PAYMENTS FOR THE TOP 30

$9.1 million – base salary cap for the Top 30 players. At least 24 Top 30 players must be contracted by 1 November, 29 Top 30 players by 1 March and 30 Top 30 players by 30 June.

$0.2 million – Veteran and Developed Player Allowance for eligible players who were either developed by the Club prior to becoming NRL players and / or have been a Top 30 player for at least 8 years at the Club or have been a Top 30 player for at least 10 years across the game

+ $300,000
 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.

What players can earn outside the salary cap:

$100,000 - Motor Vehicle Allowance – a maximum amount of five motor vehicles may be provided to players in the Top 30 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 by both a Player’s Club and the NRL. 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.

Other Benefits - Tertiary education fees, approved traineeships, medical insurance costs, relocation/temporary accommodation costs are not included in the cap but must be approved

FREQUENTLY ASKED QUESTIONS

Why have a Salary Cap?

The NRL Salary Cap serves two functions:

  1. 1. 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.
  1. 2. 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 Base Salary Cap for 2018 is $9.1m for the 30 highest remunerated players at each club plus up to $0.2m Veteran and Developed Player allowance.

For players in the Top 30 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 2017 and now has a 2018 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 2017. His 2018 Contract includes a $20,000 State of Origin bonus. This bonus will be included in the player's 2018 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.
-      Reasonable Relocation and temporary accommodation costs.
-      Payments from representative games and events such as All Stars.
-      Prize money   

.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.

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.

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

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: 
2006     A$3.9m salary cap in 2007 – up from $3.366million.
2006   Minimum wages of $55,000 (players numbered 1-17) and $50,000 (players numbered 18-25) – up from $37,500 in 2006.
2006   Origin payments increasing to $12,500 per game.
2006   Increases in Third Party Sponsorship Agreements to $150,000.
2006   Reduction in qualifying period for veteran players from 10 to 8 years under Long Serving Player Allowance.
2006   $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:
2013   A $5.150million salary cap in 2013 – up from $4.4million
2013   Minimum wages in 2013 of $75,000 – up from $55,000 in 2012
2013   Origin payments increasing to $30,000 per game
2013   Increases in Marquee Player Agreements of $250,000 to $550,000
2013   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
2013   Players outside Top 25 who play 4 or more NRL games also entitled to retirement account contribution of $9,000 per annum
2013   Test Match increases: $20,000 per player
2013   Four Nations increases: $50,000 (1st), $40,000 (2nd), $30,000 (3rd)
2013   World Cup increases: $50,000 (1st), $40,000 (2nd), $30,000 (3rd)
2013   2014 - A $5.5million salary cap in 2014
2013   Minimum wages in 2013 of $77,500 – up from $55,000 in 2012 ($75,000 in 2013).
2013   Origin payments increasing to $30,000 per game
2013   Increases in Marquee Player Agreements of $300,000 to $600,000 ($550,000 in 2013)
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
2013   Players outside Top 25 who play 4 or more NRL games also entitled to retirement account contribution of $9,250 per annum 
2013   Test Match increases: $20,000 per player
2013   Four Nations increases: $50,000 (1st), $40,000 (2nd), $30,000 (3rd)
2013   World Cup increases: $50,000 (1st), $40,000 (2nd), $30,000 (3rd)
2015   A $5.8million salary cap in 2015:
2015   Minimum wages in 2015 of $80,000 – up from $55,000 in 2012 ($77,500 in 2014).
2015   Increase to $237,500 for each club towards the RLPA Retirement Fund, made up of $9,500 per player in Top 25
2015   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:
2016   Minimum wages in 2016 of $82,500 - up from $55,000 in 2012 ($77,500 in 2014, $80,000 in 2015
2016   Increase to $243,750 for each club towards the RLPA Retirement Fund, made up of $9,750 per player in Top 25
2016   Players outside Top 25 who play 4 or more NRL games also entitled to retirement account contribution of $9,750 per annum
2018   A new 5 year Collective Bargaining Agreement agreed with the Rugby League Players Association. 
2018   Increase in the size of the NRL top squad from 25 players to 30 players
2018   $9.1million Top 30 base salary cap for Season 2018 increasing to $9.7m in season 2022 plus $0.2m p.a Veteran and Developed Player allowance and $0.1m p.a car allowance
2018   Min. Top 30 fee of $100,000 for players 1-26 in 2018 increasing at $5,000 p.a until 2022
2018   $70,000 for players 27-30 in 2018 increasing at $2,500 p.a until 2022
2018   Replacement of the NRL second tier with the NRL Development List where players will be entitled to $60,000 p.a.