NHL Salary Cap The NHL Salary Cap is the limit to the total amount of money that National Hockey League teams are allowed to pay their players and uses a " hard " cap , meaning there are no luxury taxes or exemptions . The actual amount of the cap varies on a year - to - year basis , and is calculated as a percentage of the League ' s revenue from the previous season ; for instance , in 2007 - 08 , the NHL ' s salary cap was approximately US $ 50 . 3 million per team , and for the 2008 - 09 season it was $ 56 . 7 million . Like many professional sports leagues , the NHL has a salary cap to keep teams in larger markets ( with more revenue ) from buying all of the top players and extending their advantage over smaller - market franchises . The 2009 - 10 salary cap has been set at $ 56 . 8 million . A salary cap existed in the early days of the National Hockey League ( NHL ) . During the Great Depression , for example , the league was under financial pressure to lower its salary cap to $ 62 , 500 per team , and $ 7 , 000 per player , forcing some teams to trade away well paid star players in order to fit the cap . Pre - salary cap . Prior to the resolution of the 2004 – 05 lockout , the NHL was the only major North American professional sports league that had no luxury tax , revenue sharing , salary cap , or salary floor . Player salaries did not become an issue until the 1970s , when Alan Eagleson founded the NHL Players ' Association ( NHLPA ) and the upstart World Hockey Association began competing with the NHL for players . On the other hand , owners such as Harold Ballard of the Toronto Maple Leafs spent among the league minimum on rosters , making his team the most profitable . There was little financial incentive for Ballard to spend money on star players to improve the quality of the on - ice product and attract fans , as all Maple Leafs games were sold out regardless of how poorly the team played . The 1994 – 95 NHL lockout was fought over the issue of the salary cap . The 1994 – 95 season was only partially cancelled , with 48 games and the playoffs eventually being played . Although six NHL franchises are based in Canada , all NHL salaries must be paid in U . S . dollars . This caused hardship among the small - market Canadian teams at the turn of the 20th century due to the weak Canadian dollar , as their revenues were in Canadian dollars . NHL Commissioner Gary Bettman successfully persuaded the US - based teams to donate towards a pool to mitigate the effect of the exchange rate . Current salary cap . The negotiations for the most recent NHL Collective Bargaining Agreement revolved primarily around players ' salaries . The league contended that its clubs spent about 75 % of revenues on salaries ; a percentage far higher than existed in other North American sports . NHL Commissioner Gary Bettman demanded " cost certainty " and presented the NHLPA with several concepts that the Players ' Association considered nothing more than euphemisms for a salary cap , which it had vowed it would never accept ; the previous CBA had expired on September 15 , 2004 . A lockout ensued , leading to the cancellation of the entire 2004 – 05 NHL season , the first time a major sports league in North America had lost an entire season to a labor dispute . The lockout was resolved when the NHLPA agreed to a hard salary cap based on league revenues , although the NHL reciprocated by implementing revenue sharing which would allow for a higher cap figure . The NHL salary cap is formally titled the " Upper Limit of the Payroll Range " in the new CBA . For the 2005 – 06 NHL season , the salary cap was set at US $ 39 million per team , with a maximum of $ 7 . 8 million ( 20 % of the team ' s cap ) for a player . Revenues for the six Canadian teams have all increased significantly since the lockout , and due to the fact the Canadian dollar rose to briefly reach parity with its U . S . counterpart ( the Canadian dollar has since fallen to around 88 US cents , still significantly above its lows around 2000 ) , league - wide revenues measured in U . S . dollars have been inflated accordingly . As a result of these factors , the cap has been raised each year to its current figure of $ 56 . 8 million for the 2009 – 10 season , with a cap of $ 11 . 36 million for a player . The CBA also contains a " Lower Limit of the Payroll Range " , which is the minimum that each team " must " pay in player salaries . The lower limit was originally set at 55 % of the cap , but is now defined to be $ 16 million below the cap ; therefore the 2009 – 10 minimum is $ 40 . 8 million . The difference between the salary cap and a team ' s actual payroll is referred to as the team ' s " payroll room " or " cap room " . Each year of an NHL player contract , the salary earned contributes to the team ' s " cap hit " . The basic cap hit of a contract for each year it is effective is the total money a player will earn in regular salary over the life of the contract divided by the number of years it is effective . This prevents a team from paying a player different amounts each year in order to load his cap hit in years in which the team has more cap room . Teams still use this practice , however , for other reasons . Performance bonuses also count towards the cap , but there is a percentage a team is allowed to go over the cap in order to pay bonuses . A team must still factor in possible bonus payments , however , which could go over that percentage . Salary for players sent to the minors , under most circumstances , do not count towards the cap while they are there . If a player has a legitimate long - term injury , his cap hit is still counted ; however , the team is permitted to replace him with one or more players whose combined salary is equal to or less than that of the injured player , even the additional players would put the team over the salary cap ( if the team ' s cap room is larger than the injured player ' s cap hit , they may take on as much as their cap room ) ; however , the injured player may not return to play until the team is again compliant with the original cap . The NHL has become the first of the major North American leagues to implement a hard cap while retaining " guaranteed player contracts " ' . Guaranteed player contracts in the NHL differ from other sports , notably the NFL , where teams may opt out of a contract by waiving or cutting a player . NHL teams may buy - out player ' s contracts , but must still pay a portion of the money still owed which is spread out over twice the remaining duration of the contract . Any player can be bought out for one - third of the remaining salary if younger than 26 at the time of termination , or two - thirds if 26 or older , over twice the length of the remainder of their contract . Trading cash for players or agreeing to pay a portion of a player ' s remaining salary after trading him are forbidden in the new CBA in order to prevent wealthier teams from evading the restrictions of the cap . The CBA also contains a 35 - and - over rule , sometimes referred to as the Mogilny rule . This rule states that if a player signs a multi - year deal when the player is 35 or older , starting in the second year of the contract , that amount will count towards the team ' s salary cap regardless of whether the player is on the active roster or not . This is designed to keep teams from signing older players to lucrative front - loaded contracts , thus saving cap room , in which there is no expectation the player will actually play in the latter years . Players , agents or employees found to have violated the cap face fines of $ 250 , 000 - $ 1 million and / or suspension . Teams found to have violated the cap face fines of up to $ 5 million , cancellation of contracts , loss of draft picks , loss of points and / or forfeiture of game ( s ) determined to have been affected by the violation of the cap . Waivers . Unlike other professional leagues , waivers in the NHL do not always mean an unconditional release if a player clears waivers and elects free agency . Most NHL players will need to clear waivers before they are assigned to a minor league team - the exception is a young player with very little NHL experience . Clearing waivers means every other team in the NHL has the option to ' claim ' that player off of the ' waiver wire ' , thus assuming his contract ( and cap hit ) , and providing no compensation to the originating team . If a player clears waivers , the team has the right to either send the player to a minor league affiliate which is generally a team in the AHL , or the team can elect to keep that player with their club . If a player refuses to report to the minors , the team can use that as grounds to suspend the player ( i . e . not pay them ) . To get a player back into the NHL , he would have to clear ' re - entry waivers ' , for which there are also some exceptions ( like the aforementioned young players , so - called " Veteran Minor League Players " , and players on a 2 - way contract earning under a certain amount ) . If another team claims the player on re - entry waivers , both the team that acquired the player and the team that placed that player on re - entry waivers , would split 50 - 50 of the remainder of the player ' s current contract and salary cap hit . Free Agency . There are several kinds of NHL free agency , but generally the free agent pool in the NHL is split into restricted and unrestricted free agents . All contract signings can be of any length as long as the averaged annual salary ( plus bonuses ) will fit under the team ' s salary cap . Players 27 years of age or younger , and have their contracts expiring on June 30 of that year , will become restricted free agents on July 1 if a team gives a player a qualifying offer . A qualifying offer is a single year contract offer that is either the the same amount as the previous year , or a slight raise , according to the previous year ' s amount . The ' restricted ' part of free agency comes into play with the concept of an offer sheet . An offer sheet is a contract that a new team can offer a restricted free agent . If an offer sheet is signed by the player , the originating team has the option of matching that offer , or receiving compensation from the team in the form of draft picks . The number and round of the draft picks is according to a formula based on the amount of the contract , up to four first - round draft picks . If a team does not have the draft picks required ( because they were traded away ) then that team cannot make an offer sheet . Restricted free agents that have received a qualifying offer can also be traded , even if contract terms have not been agreed upon . If a restricted free agent does not sign with an NHL club by December 1 of that year , that player is declared ineligible to play in the NHL until the following season . Some restricted free agents are eligible for salary arbitration . Salary arbitration is available to restricted free agents that have been in the league for a period of time ; it ' s also a function of age . For instance , a 21 year old player is eligible for arbitration if he has been in the league for 3 years , whereas a 24 year old player is eligible for arbitration after only one year . After a qualifying offer is made , an eligible player can elect to go through the arbitration process , where the team and the player each make an argument for a certain contract size . An independent arbiter hears the arguments and decides on a fair contract amount . If a qualifying offer is not given , or if a team rejects the amount awarded through salary arbitration , or if the player is 28 or older when the contract ends , the player becomes an unrestricted free agent . Any player who has been released outright and had their contract bought out by their team , would also be declared an unrestricted free agent .