How the salary cap works

The January transfer window opens on January 2nd and this year there is the new challenge of the League One salary cap to contend with.

What is the salary cap?

This summer clubs in League One voted for the introduction of a Squad Salary Cap in place of the Salary Cost Management Protocol.

What this means is that every club in the division can spend no more than £2.5m, for the season, on player wages.

Why was this voted in?

Charlton voted against the introduction of the salary cap, as it means clubs can only spend a limited amount on player wages, even if the club generates considerably more revenue than other teams in the division.

Director of Football Steve Gallen said: “I understand why it was voted in - because of the Covid situation and because of the financial situation that clubs could get themselves into and then struggle to get themselves out of. 

“They held a vote a couple of weeks after we got relegated. We voted for no salary cap, and so did a number of other clubs but it won through in our division by one vote, so we have to abide by the league rules.”

What payments are included in the Salary Cap of £2.5m?

When calculating total salary spending, the ‘cap’ includes:

•      Basic Wages;

•      Taxes;

•      Bonuses;

•      Image rights;

•      Agents’ fees and;

•      Other fees and expenses paid directly or indirectly to all registered players.

Are there any exceptions?

Any player born after January 1st 1999 is not included on the salary cap. So the wages of Charlton players such as Alfie Doughty, Albie Morgan and Ashley Maynard-Brewer do not count towards the salary cap. The wages of loan players born after January 1st 1999, such as Ian Maatsen and Dylan Levitt, also do not count towards the salary cap.

So what does this mean for Charlton?

Gallen explained: “We’re under the salary cap at the moment but there isn’t loads of room for manoeuvre but there are some things we can do.

“It is a bizarre situation, where anyone over 21, we can only pay a low wage to. Anyone under 21 we can pay a bit more too, as long as it is approved by our owner, who has been very good supporting us.”

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