<P> The new Collective Bargaining Agreement (CBA) formulated in 2011 had an initial salary cap of $120 million . While the previous CBA had a salary floor, the new CBA did not have one until 2013 . Starting with that season, each team is required to spend a minimum of 88.8% of the cap in cash on player compensation, and 90% in future years . However, the floor is based on total cash spent over each of two four - year periods, the first running from 2013--2016 and the second from 2017--2020 . A team can be under the floor in one or more seasons in a cycle without violating the CBA, as long as its total spending during the four - year period reaches the required percentage of the cap . This allows for unforeseen circumstances such as career ending injuries or unexpected player retirements leading to immediate penalty . As a result, teams are not forced to immediately take on a replacement for missing players which allows them to use more organic approaches such as a trade, free agency acquisition or the draft . </P> <P> The NFL's cap is a hard cap that the teams have to stay under at all times, and the salary floor is also a hard floor; penalties for violating or circumventing the cap and floor regulations include fines of up to $5 million for each violation, cancellation of contracts and / or loss of draft picks . </P> <P> The cap was first introduced for the 1994 season and was initially $34.6 million . Both the cap and the floor are adjusted annually based on the league's revenues, and they have increased each year . In 2009, the final capped year under that agreement, the cap was $128 million per team, while the floor was 87.6% of the cap . Using the formula provided in the league's collective bargaining agreement, the floor in 2009 was $112.1 million . Under the NFL's agreement with the NFLPA, the effects on the salary cap of guaranteed payments (such as signing bonuses) are, with a few rare exceptions, prorated evenly over the term of the contract . </P> <P> In transitions, if a player retires, is traded, or is cut before June 1, all remaining bonus is applied to the salary cap for the current season . If the payroll change occurs after June 1, the current season's bonus proration is unchanged, and the next year's cap must absorb the entire remaining bonus . When a player is franchise tagged the salary cap will be affected . When the salary cap can't be met for a tagged player the National Football League will fund the remainder of the contract . Only a single player may be tagged per year . </P>

When was the salary cap introduced to the nfl