Performance Bonus Carryovers
How is the bonus carryover calculated? Is the average cap hit for the team over the course of the year used in the calculation? or is it the team's cap hit at the last day of the regular season? Does LTIR factor into the calculation?
Answer
The team's final cap hit/charge for the season is based on the cap hit each day of the season all added up. Once the season is done, the performance bonuses earned are determined based on the eligible bonuses for players in that specific season. The total bonuses earned for players on a team are added to the final cap hit, and if the total is higher than the salary cap, the excess is the performance bonus carryover overage cap hit for the next season.
For example, if a team finished with an $82.4M Cap Hit for the season after adding up the cap hit for each day, and they had $150K in performance bonuses earned, the final cap hit for that season is $82.55M. With a salary cap of $82.5M, the excess is $50K, and that would be a cap hit in the following season.
There's no adjustment or impact for LTIR. However, if a team uses LTIR during the season, that means they finished the year over the salary cap. In that case, based on the formula above, all performance bonuses earned will therefore be a carryover cap hit for the following year.
