F1's Cost Cap Excludes the Two Biggest Salaries in Every Team

What the cap is actually capping

The figure for 2026 is $215 million, and it covers performance-related spending: the design, development and manufacture of the car, and the operations that make it faster.

Excluded: driver salaries, the three highest-paid non-driver staff, marketing, HR, legal and travel.

Those exclusions are not marginal. The 22 drivers on the 2026 grid earn an estimated $324 million in base salaries between them — more, in aggregate, than any single team is permitted to spend on its entire car programme.

Why the drivers were left out

The obvious objection is that excluding the largest single line item makes the cap look decorative. The reasoning is better than that.

A cost cap is trying to stop teams buying performance through engineering scale — more aerodynamicists, more wind tunnel hours, more parts. That is where money converts most reliably into lap time, and it is what turned F1 into a two-tier championship.

A driver is not engineering scale. Including salaries in the cap would mean that signing a great driver reduced the money available to build the car, so the sport’s best drivers would be a liability to the teams best able to use them. The likely outcome is a de facto driver salary cap, imposed on the only participants who are not teams and who had no seat in the negotiation.

Excluding the three highest-paid non-driver staff follows the same logic applied to team principals and technical directors — the sport did not want a rule that punished a team for employing the best people in the paddock.

Whether that reasoning survives scrutiny is contested. Team principals from smaller outfits have argued publicly for driver salaries to be brought inside, because a top driver’s pay is itself a competitive advantage that only the wealthiest teams can afford.

Both are right. The cap draws its line at engineering, and everything outside that line is a compromise.

The penalty that matters is not the fine

Red Bull exceeded the 2021 cap by about 1.6% — under the 5% threshold that defines a minor breach. The penalty was a $7 million fine and a 10% reduction in aerodynamic testing allowance for twelve months.

The fine is close to irrelevant. Seven million dollars is a rounding error to a championship-winning team, and it comes from outside the cap.

The aero testing cut is the real sanction. Wind tunnel and CFD time are rationed in F1 — teams receive an allowance on a sliding scale, with the championship leaders getting the least. Removing 10% of it takes away development capacity for a season, and development capacity is exactly what the overspend bought.

That is well-designed punishment: it takes back the kind of advantage that was gained, rather than converting it into money. Compare the NBA’s second apron, which removes roster-building tools rather than issuing fines, and the Premier League’s squad cost ratio, which borrows against next season’s headroom.

Financial penalties are weak against wealthy offenders. Capability penalties are not.

Why a cap was possible in F1 and is hard elsewhere

Motorsport had a problem other sports do not: an arms race with no natural ceiling. Any amount of money can be spent making a car faster, and unlike a football squad there is no limit to how many engineers a team can usefully employ.

The result by the late 2010s was a grid where the outcome was largely determined before the season started, and where smaller teams were going out of business.

A cap was therefore in almost everybody’s interest — including, eventually, the big teams, who were spending vast sums to stay level with each other. That alignment is why F1 achieved a hard cap when football has repeatedly failed to agree one.

It also explains why the cap survived its first serious test. When Red Bull breached it, the pressure to enforce came from the other nine teams, who had all cut budgets on the understanding that everyone would.

The unresolved part

A cap fixes spending. It does not fix starting position.

The teams that arrived at the cap already had the best facilities, the deepest institutional knowledge and the strongest staff — assets built with money spent before the rules changed, and not captured by a limit on annual expenditure.

So the cap has compressed the field without levelling it, which is roughly what it was designed to do and rather less than what it was sold as. See F1’s 2026 technical regulations for the other half of the same project, and F1 rules for the sporting framework around it.