Contract Language

Contract Language

Guaranteed Money 

Media outlets typically announce and talk about the "guaranteed money" in a player's contract. However, much of this money is only partially guaranteed. Compensation in NFL contracts can be guaranteed for three purposes: skill, cap and/or injury.

Compensation in a player contract can be guaranteed for one, two, all or none of the guarantees (subject to some rules). If money in a player contract is protected for skill, cap AND injury, that money is fully guaranteed at signing and will be paid to the player. If money is only guaranteed for one or two of the three protections, that money is only partially guaranteed.

Here is a quick breakdown of each guaranteed category:

Skill guarantee: If a player contract is terminated because, in the team's opinion, he does not have the requisite skill (due to a loss or lack of skills comparable to others on the team at his position), the player will be entitled to any money that is protected by a skill guarantee.

Cap guarantee: If a player contract is terminated so that a team can get under the salary cap, sign a free agent or re-sign one of its current players, the player is entitled to any money protected by a cap guarantee.

Injury guarantee: If a player is released but is currently unable to perform football duties (i.e., doesn't pass a physical) as a result of team activities, he is entitled to any money in his contract protected against injury. Injury-only guarantees is the most common partial guarantees.

Full guarantees (guaranteed at signing): Money is fully guaranteed at signing if guaranteed for skill, cap and injury purposes. Deshaun Watson’s 5-year, $230 million contract with the Browns is guaranteed for skill, cap & injury.

Most fully guaranteed money at signing: Deshaun Watson, Browns ($230 million)

Contract Renegotiations

The first renegotiation of a veteran contract can occur at any time, but any subsequent increase in salary during the original terms of the contract can only happen twelve months after the most recent renegotiation. Teams can’t renegotiate terms from any prior year of a contract. After the final regular season game, terms for the current season can’t be renegotiated.

Base salary

Formally known as "Paragraph 5" salary due to its place in a standard NFL Player Contract, it is the compensation a player receives during the regular season. The collective bargaining agreement set league minimums for base salaries. A player's "game check" is 1/18th of his base salary in a 17-game season. When a player is suspended for a game, he forfeits 1/18th of his base salary.

In 2020 and in the Final League Year (2030), players will be paid 100 percent of their base salary in weekly or bi-weekly amounts. This changes from 2021-2029 when players will be paid 50 percent of their salary over the course of a period that is double the number of weeks the player is eligible to be paid for (i.e. 18-week regular season would be paid over a 36-week period).

Largest base salary in 2025: DAL Dak Prescott ($47.75 million) 

Signing Bonus 

Money earned by a player for signing his contract. Typically paid out within the first 12-18 months. Prorated against the salary cap for the life of the contract (five-season maximum). This is how the Cowboys could give Dak Prescott a $66 million signing bonus in 2021. The bonus counts for $13.2 million on the Cowboys cap in each of the 5 seasons following his signing in 2021 (the four-year contract has a 5th season that voids).

Largest signing bonus in contract: DAL Dak Prescott ($80.0 million)

Roster Bonus

Compensation earned by remaining on a team's roster on a certain date. Roster bonuses count in full against the salary cap in the season in which they are earned, unless fully guaranteed at signing. They are used to avoid signing-bonus proration, which pushes dead money into the future.

Largest roster bonus in 2025: KC Patrick Mahomes ($32.35 million)

Per-Game Roster Bonus

A roster bonus awarded on a per-game basis for being on the team's gameday (47 or 48-man) roster (“Active List”) or its active (53-man) roster (“Active/Inactive List”), which varies by contract. For example, in a 17-game season, a player with a $1.7 million per-game roster bonus for being on the gameday roster would earn $100,000 for each game he is active. Any previous contract clauses for 46- and 53-man per-game roster bonuses will be amended to reflect the new roster sizes.

Note: Under the new CBA, teams are permitted to have 48 players active on gameday if said team has eight active offensive linemen. If the team has fewer than eight players whose primary position is center, guard or offensive tackle, it can only have 47 gameday actives. Teams can still not exceed a 53-man Active/Inactive List unless it is promoting one or two practice-squad players using the “Standard Elevation Addendum,” in which case the team can expand its roster to 54 or 55 (only using said practice-squad players).

Option Bonus

Gives a team (or, at times, a player) the ability to exercise the current or future years of the contract by paying a bonus. Prorated over the life of the contract (like a signing bonus, up to a max of five seasons).

Largest option bonus in 2025: JAX Trevor Lawrence ($35.0M). Must be exercised by March 21.

Workout Bonus 

Compensation for attending an agreed-upon percentage of the offseason workouts. No workout bonus can require participation in beyond 84.375 percent of the team’s scheduled workouts (i.e. a player can miss five of 32 scheduled workouts and still receive his bonus.

Largest workout bonuses in 2025: ARI Kyler Murray ($1,857,000).

Reporting Bonus

Earned by reporting to team activities by a specified date.

Example: Darrelle Revis had a $1 million reporting bonus in his 2010 contract with the Jets, as the team sought to avoid further training camp holdouts.

Incentives (LTBE/NLTBE)

Incentives in a player contract are limited to the list provided in Exhibits A-C in Article 13 Section 6 of the NFL's collective bargaining agreement (page 116-119).

Player incentives are considered "likely to be earned" (LTBE) or "not likely to be earned" (NLTBE) based on the player or team's prior-year performance.

For example, if a player has a $500,000 incentive for accumulating 1,000+ rush yards in the upcoming season and he had 1,000+ rush yards the previous season, the incentive is considered LTBE. If he did not record 1,000+ rush yards in the previous season, the incentive is considered NLTBE.

Except in certain circumstances, LTBE incentives count against the team's salary cap in the current season, and NLTBE incentives do not count against a team's current year's cap. Except in rare cases, unearned LTBE incentives are credited to the following season's salary cap, while earned NLTBE incentives are charged against the following season's salary cap.

Example: Eagles RB Saquon Barkley signed a 3-year contract in 2024 free agency with multiple incentives, that all hit in 2024: $500,000 for 1st-Team All-Pro, $250,000 for 1,500+ scrimmage yds, $250,000 for 2,000+ scrimmage yards, $250,000 for Conference Championship win & $250,000 for Super Bowl LIX win

Salary escalators

A salary escalator is similar to an incentive in that it is triggered by attaining certain performance thresholds. However, the extra money is not always guaranteed to be received.

An earned escalator translates into a raise in a future year(s) of the contract. If the escalator applies to a non-guaranteed season and the player is released prior to it, he will not receive the benefit of his escalator. Contracts can also contain de-escalators that lower a player's salary for failing to reach performance measures. 

Dead money

Refers to salary a team has already paid or has committed to paying (i.e., a signing bonus, fully guaranteed base salaries, earned bonuses, etc.) but has not been charged against the salary cap.

In business terms, it is essentially a "sunk cost." Any money a team pays a player must be accounted for against the salary cap. If there is dead money in a player's contract and he is released or retires, that charge will accelerate onto the team's salary cap for the current year.

Example: The Broncos were left with an $85.0M dead salary cap charge after releasing Russell Wilson in the 2024 offseason

There is one avenue to lower this cap hit in a current League Year: the June 1 designation. Teams can spread the cap hit over two seasons by releasing or trading a player after June 1—any signing bonus prorations for future seasons are charged to the following seasons’ salary cap. Teams are allowed to release two players prior to June 1 (but on or after the first day of the League Year) while still using this designation and getting the same cap treatment. However, the cap savings created by a June 1 designation do not take effect until after June 1.

For example, the 49ers traded WR Deebo Samuel prior to June 1, accelerating a $31.0M in dead money in 2025. Creating a $15.2 million higher cap charge than the $15.8 million cap hit Samuel was scheduled to have in 2025. Had the team traded Samuel post-June 1 or cut Samuel with a post-June 1 designation, it would spread the dead cap over the 2025 and 2026 seasons.

Essentially, the salary cap is like a credit card, minus the interest. Anything that is paid out to a player must be paid back to (and accounted for against) the salary cap at some point. 

Guaranteed money, dead money, and cap savings example 

Example: Chargers EDGE Joey Bosa Contract (Contract value: 5 years, $135 million) 
- Guaranteed Money: $102.0 million. 
- Fully Guaranteed Money: $78.0 million. 
- Signing Bonus: $35 million ($7.0 million in cap space each season for first five seasons of the deal)
- 2020: $15.0M cap hit - $78.0M in dead money = -$63.0M in cap savings
- 2021: $20.8M cap hit - $63.0M in dead money = -$42.3M in cap savings
- 2022: $28.3M cap hit - $42.3M in dead money = -$14.0M in cap savings
- 2023: $31.0M cap hit - $14.0M in dead money = $17.0M in cap savings
- 2024: $29.0M cap hit - $7.0M in dead money = $22.0M in cap savings
- 2025: $25.4M cap hit - $0M in dead money = $25.4M in cap savings

> Cap savings: pre-June 1 release (According to Spotrac)

Example: Joey Bosa Contract Guarantees 
Total Guarantees: $102.0 million
Fully Guaranteed Total: $78.0 million
- Signing Bonus: $35.0 million - 2020: $1.0 million base salary, $7 million roster bonus
- 2021: $13.75 million base salary
- 2022: $21.25 million base salary - 2023: $24.0 million base salary

Veteran Salary Benefit

Formerly known as the minimum salary benefit, the veteran salary benefit allows teams to offer a "Qualifying Contract" to any player with at least four credited seasons at a reduced salary cap hit. Under this provision, a qualifying contract is a one-year deal worth the minimum base salary applicable to a player with his number of credited seasons, plus $167,500 in additional compensation (i.e., signing bonus, roster bonus, incentive, etc.). These contracts are charged against the salary cap at the rate of a player with two credited seasons that league year.

Four-Year Qualifying Contract

Another type of veteran salary benefit, it can be offered to a player with at least four credited seasons whose contract with a team has expired after being on said team for four or more consecutive, uninterrupted league years prior to his contract expiring. Such a player must have been on the team's 90-man active/inactive list for said seasons (and every regular-season and postseason game). Teams can sign a maximum of two eligible players to this type of salary benefit.

A qualifying contract under this benefit is a one-year deal with a base salary of up to $1.55 million more than the minimum base salary for said player. However, if a team does sign two players to a qualifying contract, it can only give a combined $1.55 million in additional base salary between the two deals. Under such agreements, only the applicable minimum base salary (not the $1.45 million benefit) is charged against the salary cap.

Waivers

When a player contract is terminated, he is either free to negotiate and with a team at any time or subject to waivers. When released, a contract for a player with fewer than four credited seasons is subject to waivers at all times. The waiver system allows teams to place a claim on a player contract before that player becomes a free agent. The team with the highest priority will be awarded the player. A contract for a player with four or more credited seasons is not subject to waivers when released from the day after the Super Bowl through the trade deadline. After this date and outside of this period, the contract must be placed on waivers and can be claimed by another team.

ROOKIE CONTRACTS

Length: Contracts for drafted rookies are set at four years. Undrafted rookies receive three-year contracts.

Fifth-Year Option: The fifth-year option got a makeover under the new CBA. Each player selected in the first round of the NFL draft has a team option for a fifth season automatically included in his contract, which extends the four-year rookie contract to a fifth season for a non-negotiable fixed amount. Teams must exercise this option in the time after the conclusion of the player's third regular season but prior to May 1 of the following league year.

The new CBA restructured this option starting with the 2018 draft class so that different fifth-year option salaries can be earned based on performance in the first three seasons of a player’s career. The fifth-year option is fully guaranteed when exercised. If such a player's fourth-year salary is not fully guaranteed for skill, cap, and injury, it becomes guaranteed as well when the option in exercised.

First-round picks will receive a base salary equal to the cap percentage average of the transition tag for the player's position in his fourth season but using the appropriate third- through 25th-highest PYS if they have not been selected to the Pro Bowl on the original ballot and did not (a) partake in at least 75 percent of his team's offensive or defensive plays in two of his first three regular seasons or (b) play a cumulative average of 75 percent of his team's offensive or defensive plays over the course of his first three regular seasons or (c) log at least 50 percent of his team's offensive or defensive snaps in each of his first three regular seasons.

First-round picks will receive a base salary equal to the cap percentage average of the transition tag for the player's position in his fourth season but using the appropriate third- through 20th-highest PYS at the player's position if they have not been selected to the Pro Bowl on the original ballot but did (a) partake in at least 75 percent of his team's offensive or defensive plays in two of his first three regular seasons or (b) play a cumulative average of 75 percent of his team's offensive or defensive plays over the course of his first three regular seasons or (c) log at least 50 percent of his team's offensive or defensive snaps in each of his first three regular seasons.

A first-round pick named to the Pro Bowl on the original ballot in one of his first three regular seasons will receive a fifth-year option equal to the transition tag at his position for the league year of the player's fourth year of his rookie deal. Those selected to two or more Pro Bowls in their first three seasons will receive a fifth-year option equal to the franchise tag applicable to his position in the player's fourth season.

Players on the fifth-year option will be fined $40,000 for each day of any late reporting or absence from training camp (increased to $45,000 in 2026) and one week of regular-season salary for each preseason game missed.

Examples (2022 draft class):

- Jets CB Sauce Gardner would earned the highest fifth-year option category (made multiple Pro Bowls on original ballot), which would be worth a projected $20.2M in 2026.

- Lions EDGE Aidan Hutchison would earn the 2nd-highest fifth-year option category (made 1 Pro Bowl on original ballot), which would be worth a projected $20.9M in 2026

- Jaguars EDGE Travon Walker has not been selected to a Pro Bowl on the original ballot but would earn for the third-highest fifth-year option category (played over 75 percent of the Jaguars offense plays in each of the first 3 seasons), which would be worth a projected $19.8M in 2026 

Rookie Salary 

A player's rookie salary is composed of the following: signing bonus, base salary, offseason workout per diem (beginning in the second season), base-salary guarantees, permitted performance incentives, roster bonuses and reporting bonuses.

Proven Performance Escalator (PPE)

This is intended to reward non-first-round draft picks for contributions that exceed the expectations of their draft status. The PPE is not considered "Rookie Salary" and is not subject to the 25 percent rule (more on that below).

Beginning with the 2018 draft class, players drafted in the second through seventh rounds are eligible to receive the Level One, Level Two or Level Three PPE. Those selected in the first round, as well as undrafted players, are not eligible for any PPE. Any player who qualifies for multiple levels of the PPE will receive the highest escalator but can't receive more than one.

The PPE is now a three-level, non-negotiable amount in which a player's base salary in the fourth year of his rookie contract increases if he meets certain predetermined thresholds.

The Level One PPE is structured differently for second-round picks and those selected in Rounds 3 through 7. In order to qualify for Level One, second-round picks must either (a) play 60 percent of his team's offensive or defensive plays in any two of his first three seasons or (b) participate in a cumulative average of 60 percent of his team's offensive or defensive plays over the course of his first three regular seasons. For third- through seventh-round picks, players can hit either (a) or (b) above, but the threshold to reach drops to 35 percent of such plays. For such players, the Level One PPE increases a player's fourth-year base salary to the original-round tender for restricted free agents set for the player's fourth season.

A player selected in the 2nd through 7th round will qualify for the Level Two PPE if he participates in 55 percent of his team's offensive or defensive plays in each of his first three regular seasons. The amount of the Level Two PPE is right of first refusal tender in the player's fourth season, plus $250,000. Dolphins’ safety Jevon Holland, a 2nd-round pick in 2021, has played 80.7 pct of the team’s defensive snaps since 2021, according to Next Gen Stats, and will earn the Level Two PPE.

To qualify for the Level Three PPE, a second- through seventh-round pick must be selected to the Pro Bowl on the original ballot in at least one of his first three seasons. The Level Three PPE is equal to the difference between the second-round tender for restricted free agents and the player's Year 4 rookie salary, less any signing bonus prorations. The player's Year 4 base salary increases by this amount.

Notable players who earned the PPE in 2024: QB Brock Purdy (level 3), RB James Cook (level 3), RB Breece Hall (level 1), TE WR George Pickens (level 2), WR Khalil Shakir (level 1), Isaiah Likely (level 1), LB Nik Bonito (level 3), CB DaRon Bland (level 3) 

Performance Incentives 

While veterans can agree to various incentives, rookie incentives are based on playing an agreed-upon amount of a team's offensive or defensive plays. All incentives in Year 1 of a rookie contract are considered Likely To Be Earned (LTBE).

Rookie performance incentives rules differ by the round a player was drafted in. For first- and second-round picks, the minimum amount of playtime a player can be rewarded for is set at 35 percent in the initial contract year and 45 percent in any other year of the deal. For players drafted in the third round and later, along with players who go undrafted, the minimum playtime incentive is set at 15 percent for the first year and 30 percent for any subsequent years. Rookie incentives must be set for a specific playtime percentage (i.e., 40 percent of plays) and can't be awarded based on improving in such percentage year over year.

These incentives can't be guaranteed for skill, injury or cap and can only be based on playtime in the current league year. Earning or failing to earn an incentive cannot modify, nullify, or create another incentive clause. Unearned incentives cannot be carried over into future seasons.

Renegotiations

Rookie contracts for drafted players can't be renegotiated or altered in any way until after the last regular-season game of the third contracted year. Undrafted rookies must wait until after their second season to amend a contract. Any rookie contract that is renegotiated or extended in any way is no longer considered a rookie contract and is not restricted by the rules governing such contracts.

25 Percent Increase Rule

Unless a player's base salary is set at the minimum every year, no team can sign a player to a contract that would give him a raise of more than 25 percent annually. So, the second year of the contract can't provide a salary more than 25 percent of the first year, and after that, each subsequent year can't offer an increase of more than 25 percent of his previous year's salary.

ADJUSTED AVERAGE PER YEAR

Due to contracts being signed in different years under salary caps, it can be misleading to merely look at the average per year (APY) of a contract signed in a different season. A more realistic picture of a signed player's value can be attained by using adjusted APY.

The way agents and others find a common denominator is by utilizing salary cap percentages. Cap percentages are used to compare contracts that were agreed to and signed in a different financial landscape and allow those involved to identify the true financial benchmarks of the current negotiation.

Consider two of the NFL’s highest-paid pass rushers: Myles Garrett & Josh Hines-Allen.

The Browns signed Myles Garrett to a 5-year, $125 million deal in 2020, which was the highest among all pass rushers at the time it was signed. The 2020 salary cap was $198.2 million, and Garrett’s $25 million average salary accounted for 12.6 percent of the Browns unadjusted 2020 cap space. When adjusted for 2025, his adjusted APY is $35.2M.

Now consider Josh Hines-Allen, who signed a 5-year, $141.2 million deal with the Jaguars in 2024. Even though the APY of Hines-Allen’s contract ($28.3 million) is higher than Garrett’s ($25.0 million), Garret’s adjusted APY is higher. In 2024, $28.3 million was 11.1 percent of the salary cap; 11.1 percent of the $279.2M 2025 cap is $31.0M. 

CONTRACT RESTRUCTURES 

A typical contract restructure is when a team converts part of a player’s base salary (or a roster bonus) into a signing bonus to create immediate cap relief. This does, however, increase the player’s yearly cap hits thereafter by pushing more dead money into future years.

Cowboys QB Dak Prescott ($89.9M cap hit) and Seahawks WR DK Metcalf ($31.9M cap hit) are two examples of players who could have their contract restructured this offseason.

To use a real-life example, we can use Aaron Donald’s previous contract and see how the Rams create quick cap space in the 2021 offseason. Donald had a base salary of $19.9 million in 2021. The Rams dropped his base salary to $1.9 million in 2021. The Rams converted the remaining $18.0 million into a signing bonus, which would allow them to spread that money over the remaining 4 years of the contract ($4.5 million per season).

This allowed the Rams to reduce his cap hit from $27.9 million to $14.4 million in 2021, creating $13.5 million in cap space. However, this restructure increased his cap hits from 2022-2024 by $4.5 million each season: from $22.3 million to $26.8 million in 2022, $19.0 million to $23.5 million in 2023, and $21.8 million to $26.3 million in 2024.

- The following is a breakdown of the Rams and Aaron Donald’s contract restructure using the format above:

Aaron Donald Contract

Hypothetical Restructure

2021 Season Cap Hit: $14.4 million (Decreased cap by $13.5M) - $1.9M base, $8.0M sign bonus proration, $4.5M restructure proration

2022 Season Cap Hit: $26.8 million (Increased by $4.5M) - $9.3M base, $5.0M roster, $8.0M SB proration, $4.5M restructure proration

2023 Season Cap Hit: $23.5 million (Increased by $4.5M) - $14.0M base, $5.0M roster, $4.5M restructure proration

2024 Season Cap Hit: $26.3 million (Increased by $4.5M) - $16.75M base, $5.0M roster, $4.5M restructure proration

> Previous hits: 2021 ($27.9M), 2022 ($22.3M), 2023 ($19.0M), 2024 ($21.8M) 

ADDITIONAL COMPENSATION 

Postseason Pay: In 2024, NFL players were paid for postseason games in the following amounts based on playoff round. Players on teams that won their division earned $54,500 for their Wild Card game, while players on non-division winners or teams on bye (#1 seeds) earned $49,500 for the initial round. Players earned $54,500 for a Divisional Round game and $77,000 for the Conference Championship. The Super Bowl winners earned $171,000 each, and the losers took home $96,000.

Players on the active list, inactive list or injured reserve list were paid this amount for the 2024 postseason (other players are subject to all or partial playoff compensation). These amounts increase annually over the course of the new CBA.

Pro Bowl Pay: In 2024, players on the team that won the Pro Bowl received $92,000 for participation. Players on the losing team received $46,000 this season. These amounts increase annually over the course of the new CBA.

ROSTER SIZES

Active ("Gameday") List: If a team has a minimum of eight offensive linemen (primary position being center, guard or offensive tackle) on the active game day roster, the maximum roster size is 48 players. If a team has fewer than eight offensive linemen, the maximum drops to 47 players.

Active/inactive ("53-Man") List: The active/inactive list remains at 53 players for the regular season and playoffs. However, a team can increase its roster to 54 or 55 players only by using the standard elevation addendum (explained below) to bring one or two practice squad players to the active/inactive list.

PRACTICE SQUADS

Roster Size: The practice squad consists of 16 players as of 2025. However, teams can sign 17 players to their practice squads if one of those players is a member of the NFL's International Pathway Program.

Eligibility: The rules for roster size and eligibility for the Practice Squad were amended by the NFL and NFLPA in May 2022. Players with no accrued seasons and those with fewer than nine regular-season games in their lone accrued season are eligible for the practice squad. Teams can also have a maximum of ten players who have earned no more than two accrued seasons. Each team to have up to six players with unlimited accrued seasons on the practice squad. However, the number of players in the last two categories cannot exceed 10 players combined. 

Standard Elevation Addendum 

Now included in all practice squad contracts, the standard elevation addendum allows teams to move a player from the practice squad to the active/inactive list for one week and then back to the practice squad without subjecting him to waivers. Under this addendum, a player reverts back to his team's practice squad on the first business day after the game in which he is elevated.

These players receive the applicable minimum salary for a player with his number of credited seasons (prorated for one week of regular season pay or the applicable postseason amount). This clause can be used by a team for a maximum of two regular-season or postseason games per player per season.

Each practice squad players can be elevated for a maximum of three regular season games in the same League Year. After this, any subsequent elevation of the player will require the team to add him to their 53-man Active/Inactive List. The team must then waive or terminate his player contract before the player can be re-signed to the Practice Squad. If the player is re-signed to the Practice Squad this way, the player is again eligible to be elevated for the previously mentioned maximum of three games.