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The NHL trade deadline is here, meaning the term “salary cap” is ferociously being punched into Google as fans try to determine what players their teams can afford. Fear not, as The Sporting News has you covered.
The NHL’s salary cap can be a bit complicated, just like any league’s salary cap.
There are a number of exceptions, disclaimers and ways to go around the cap restrictions that NHL general managers need to figure out, especially at this time of year when contenders are looking to maximize every last penny they have.
Here is a deep dive into the NHL’s salary cap and its restrictions.
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What is the NHL’s salary cap?
There is a maximum cap for a team in the 2022-23 season and it’s $82.5 million, while the minimum cap is $60.2 million.
Next season, the salary cap is expected to increase by $1 million, going up to to $83.5 million.
What counts towards the NHL’s salary cap?
When it comes to the salary cap, there are a number of factors that contribute to it.
Any player that is on the NHL roster has what is referred to as an AAV (annual average value). It’s calculated by adding up the contract’s total salary and signing bonuses, divided by the number of years in a contract. That goes towards a team’s cap hit.
Any player on an AHL roster with an AAV of over $1.075 million and on a one-way contract will be counted towards the cap as well. Any suspended or injured players will also have their AAVs go towards the cap.
In addition, any salary retained in a trade, any buyouts and the AAV of a player who signed a multi-year deal at or after the age of 35 and then retired will count.
What does not count towards the NHL’s salary cap?
If a player is on a two-way contract and is in the AHL, that does not count, nor does any player on a one-way playing in the AHL that carries an AAV of $1.075 million or less.
Prospects playing in juniors or overseas in Europe that are under contract do not count, nor do players that are suspended for off-ice events.
Finally, if a player signed a multi-year deal before the age of 35 and then retired, their AAV does not go against the cap.
Does the NHL have a hard cap?
Yes, at no point in the regular season can a team go over the cap.
Leagues like the NBA have a salary cap, but also allow teams to go and then pay a luxury tax penalty. That’s not how it goes in the NHL. No teams can go over the limit, resulting in teams at times having to play shorthanded if injuries/illness occur and a player suitable to fit under the cap cannot be recalled in time.
What is long-term injured reserve?
When a player is hurt and is going to be out for a long period of time, a team will place them on the long-term injured reserve (LTIR).
That helps their cap situation a bit, but it’s not as simple as removing the money from the books. Instead, a team is allowed to exceed the cap, using what is referred to as the “LTIR pool.”
If a player carries a $5 million cap hit and is going to be placed on LTIR on a team that carries only $200,000, then their LTIR pool is $4.8 million ($5M-$0.2M). However, once a player returns off the LTIR, then the team must get under the maximum cap threshold before activating him off LTIR.
Can a team go over the salary cap in the NHL playoffs?
Yes, in the postseason, there is no salary cap. A team can call up as many players as needed carrying any amount of cap with them.
This caused some controversy last season when the Lightning placed star Nikita Kucherov on LTIR for the entire season with a hip injury. Kucherov carried a $9.5 million cap hit that, by using the LTIR pool, allowed the Lightning to have more players on the roster during the regular season, and then activated Kucherov for the playoffs.
The move worked out quite well for the Lightning, winning their second Stanley Cup in a row with Kucherov registering the most points in the postseason.
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