Learn the CBA

The NHL Collective Bargaining Agreement governs contracts, cap accounting, free agency, and nearly every financial transaction in professional hockey. This guide covers the fundamentals.

How the Salary Cap Works

The NHL salary cap is a hard upper limit on the total combined cap hits of all players on a team's roster. For the 2025-26 season, the cap ceiling is $97.5 million (USD), with a floor of approximately $65 million. Every team must spend above the floor and cannot exceed the ceiling at any point during the regular season.

The cap is calculated on a per-day basis. When a player is added to or removed from the active roster, the team's cap allocation adjusts accordingly. This means a player on Injured Reserve does not count against the cap in the usual sense, but a player with a two-way contract counts differently depending on which league they are playing in.

The cap ceiling is set each summer by the NHL and NHLPA based on league revenues, which grow through a Escrow system. During the COVID-affected seasons (2020-21, 2021-22), the cap was held flat while players repaid escrow debt. The cap will continue rising each year as the sport's revenues grow.

Key rule: Teams must have a minimum of 23 players under contract during the regular season and may not exceed 23 active roster spots without placing a player on IR, LTIR, or another exemption.

Cap Hit vs. AAV vs. Salary

These three terms are often used interchangeably, but they refer to slightly different things:

AAV (Average Annual Value) — The total value of a contract divided by its length in years. A 5-year, $37.5M deal has an AAV of $7.5M. This is always equal to the cap hit for standard contracts.

Cap Hit — The number that actually counts against the salary cap ceiling. For most standard contracts, cap hit equals AAV. For performance bonus contracts (ELCs, P35 deals), cap hit may differ.

Annual Salary — The actual money a player receives each season. Unlike AAV, salaries can vary year-to-year within a contract — common structures include back-diving (lower salaries in later years) or front-loaded deals (higher early salaries). Salaries cannot vary by more than 35% within a contract or 50% over its full term.

For example, a player might earn $9M in salary year one and $6M in year two of a 2-year deal, but the AAV and cap hit would be $7.5M per year. The team pays different amounts cash-wise each year, but the cap impact is identical each season.

Signing bonuses are paid upfront and count toward the cap in the year they are earned. They are often used in contracts for players with NMC/NTC protection to make reclaiming money difficult if the player retires or is placed on LTIR.

Long-Term Injured Reserve (LTIR)

Long-Term Injured Reserve is one of the most impactful and misunderstood mechanisms in the NHL CBA. A player may be placed on LTIR if they are expected to miss a minimum of 24 days and 10 games with a legitimate hockey-related injury.

When a player goes on LTIR, the team does not simply gain cap space equal to that player's cap hit. Instead, the team gains an LTIR pool — extra cap room above the ceiling — equal to the amount needed to fill the roster to the cap limit.

A simplified example: if a team is at $91M against a $97.5M cap and places a $9M player on LTIR, their LTIR pool is not $9M. It is the amount they were under the cap before ($6.5M), meaning they can now spend up to $97.5M + $6.5M = $104M. The $9M player's full hit is still on the books — the LTIR pool just creates extra room above the ceiling.

Critical playoff rule: Teams that use LTIR during the regular season must come back under the cap ceiling by the playoffs. A team cannot use LTIR cap space in the post-season. If a team cannot come under the ceiling naturally, they must trade or waive players.

LTIR is commonly used by teams with expensive, injured veterans to maintain a competitive roster. The cap hit of an LTIR player counts as dead cap when calculating the team's cap position.

Buyouts

A team can terminate a player's contract early by buying them out. The CBA prescribes a specific formula for how much the player must be paid and how the resulting dead cap charge is spread.

The buyout formula depends on the player's age at the time of buyout:

Under 26 years old — Player receives 1/3 of remaining contract value. Dead cap spread over twice the remaining years.

26 or older — Player receives 2/3 of remaining contract value. Dead cap spread over twice the remaining years.

For example: a 30-year-old with 3 years, $18M remaining receives $12M (2/3 of $18M). The team owes $6M in dead cap, spread over 6 years — $1M per year — even if the player signs elsewhere and performs.

Dead cap from a buyout counts against the cap ceiling each year it is outstanding. Teams with multiple buyouts on the books can find themselves significantly constrained by players no longer on their roster.

Compliance buyouts are a special one-time provision sometimes negotiated in CBAs after lockouts. They allow teams to buy out a player without incurring dead cap charges, effectively erasing the contract. The most recent compliance buyout window was in 2013.

Entry Level Contracts (ELCs)

All players entering the NHL for the first time must sign an Entry Level Contract (ELC). ELCs are subject to strict maximum salary and term limits based on the player's age when they first sign:

Age 18-21 — Maximum 3-year ELC term. Maximum NHL salary $925,000 for 2025-26.

Age 22-23 — Maximum 2-year ELC term. Same salary maximum applies.

Age 24-25 — Maximum 1-year ELC term.

Age 26+ — Not subject to ELC rules; signs standard contract.

ELC cap hit equals the stated NHL salary plus any signing bonuses averaged over the term. Players on ELCs can earn substantial performance bonuses (up to $850,000 in schedule A, and $2.85M in schedule B) that exceed the cap hit — these create potential bonus overages, which are charged against next year's cap if earned.

When a player on an ELC plays fewer than 10 NHL games in a season (the "slide rule"), the ELC slides forward one year. This is significant for highly touted prospects who spend development time in junior or the AHL.

No-Movement & No-Trade Clauses

The CBA allows teams to include certain trade and movement protections in player contracts. These are negotiated as part of the contract and are significant for team-building flexibility.

NMC — No-Movement Clause — The team cannot trade, waive, assign to the AHL, or place on waivers the player without his consent. This is the strongest available protection and cannot be included in ELCs.

NTC — No-Trade Clause — The player must consent to any trade. Often functionally identical to an NMC, but specifically about trades rather than all roster moves.

MNTC — Modified No-Trade Clause — The player submits a list of a specified number of teams he can be traded to without consent. Common structures include '10-team no-trade' lists (player can block 10 teams) or '15-team lists'.

These clauses significantly reduce a team's flexibility, especially when a player's performance declines. A veteran with a full NMC who is no longer performing cannot be placed on waivers or traded without his consent, potentially forcing the team to buy him out or carry dead weight on the roster.

NMCs and NTCs are only permitted for players who have at least 7 years of NHL experience (achieved status). Teams cannot promise these protections in ELCs or contracts for younger players below the experience threshold.

Restricted vs. Unrestricted Free Agency

When a player's contract expires, their free agency status determines what options both they and their team have. This is one of the most complex areas of the CBA.

Unrestricted Free Agents (UFAs) are fully free to sign with any team without any compensation being owed to their former club. To become a UFA, a player must meet one of the following criteria:

Age 27 or older with an expiring contract, or
7 or more seasons of professional experience (accrued seasons) with an expiring contract

Restricted Free Agents (RFAs) are players whose contracts expire but who do not yet qualify as UFAs. Their team retains the right to match any offer sheet signed with another team. If the original team matches, the player stays. If they do not match, the signing team owes draft pick compensation:

$14.3M+ AAV — 4 first-round picks

$10.8M–$14.3M — 3 first-round picks

$7.2M–$10.8M — 2 first-round picks + 1 second

$4.4M–$7.2M — 1 first-round pick

$2.2M–$4.4M — 1 second-round pick

Under $2.2M — 1 third-round pick

The steep compensation required for offer sheets makes them rare in practice. Most RFAs re-sign with their current team or negotiate new deals. Teams also have the option to issue a qualifying offer (equal to last year's salary or a percentage of it) to maintain RFA rights. Failure to issue a qualifying offer results in the player becoming a UFA.