Explaining how the NFL works, Part 9: Veteran Salary Benefit contracts

Whether it’s when the NFL is in the full swing of its regular season or if it’s during the downtime of the early summer, there still is constant news and happenings with the league that has made itself relevant 365 days a year. When various things are discussed, sometimes there are terminologies and procedures where fans might have a general understanding of things. Even the most die-hard fans may have certain areas they don’t understand exactly what various things mean and wish to have a better understanding.

Over the next few weeks, I will take some time to do my best in thoroughly explaining some of the various inner workings of things in the NFL. These are not on-field items but more from an administrative standpoint. Whether it be understanding the waiver wire, the Reserve/Injured List, or the breakdown of the practice squad, we’ll take a look at some of the various terms that are thrown around and utilized in descriptions of things in the NFL but may not be fully understood.

Next up is looking at special salaries which don’t have every dollar count against the salary cap.

Veteran Salary Benefit contracts

When it comes to the salary cap, I have said how “the bill eventually comes due” in that every dollar is accounted for at some point, the only question is when. While that statement is true in general, there are specific contracts where a player can earn more money and have part of their salary not count against the salary cap.

Enter the veteran salary benefit contract.

This is a very specific contract which actually occurs quite often on teams every season. These contracts are very useful for both NFL teams and veteran players as it allows those who may not even be starters to stick around with teams and where the idea of salary cap savings could be appealing to go with a player on a rookie deal.

Qualifications

In order for a player to be eligible for a Veteran Salary Benefit contract, they must have at least four credited NFL seasons. These contracts are only for one season but players can sign these contracts every season if they choose. The base salary for these contracts are for the league minimum based on the players credited seasons. Players can receive a signing bonus with these contracts but there is a cap on how much can be given. Defined in the most recent Collective Bargaining Agreement (CBA), the maximum amount of the signing bonus goes up every two seasons with the 2022 in 2023 seasons set at $152,500.

Where is the savings?

If a player signed a contract that qualifies for the Veteran Salary Benefit, they will be paid the base salary based on their credited seasons but the salary cap hit will only be for that of a player with two credited seasons. The remaining money that is paid the player is considered a “benefit” and does not count on the salary cap. For the 2023 season, the base salary of a player with two credited seasons is $940k.

Examples from the Steelers 2023 roster

For reporting on these salary cap numbers, all the information is coming from overthecap.com.

The first example to look at is a player with the lowest possible cap hit they could bring. Although there are several examples such as Duke Dawson, Anthony Miller, and reportedly Mason Rudolph, I’ll look specifically at wide receiver Miles Boykin. Entering his sixth season in the NFL, Miles Boykin signed a deal with the Steelers for the league minimum with his number of credited years of $1.08 million and did not include a signing bonus. Because this contract was filed as a Veteran Salary Benefit contract, Boykin only counts $940,000 against the salary cap.

The next example are players such a Chandon Sullivan and Armon Watts. Also having a base salary of $1.08 million based on their years of service, each of these players received the maximum signing bonus of $152,500 to where they still count on a veteran salary benefit contract. Their salary cap hit is the $940k base salary plus the $152,500 signing bonus to have a salary cap hit of $1,092,500 which comes in just like the previous group with a savings of $68k.

Although $152,500 is the maximum signing bonus a player can receive, it’s not an “all or nothing” deal like the two previous examples. Le’Raven Clark, a player going into his seventh NFL season and therefore has a base salary of $1.165 million, was given a $50k signing bonus and his veteran salary benefit contract has a salary cap hit of $990k.

One final example from this year’s Steelers roster is their most recent signing of Markus Golden which given the maximum player payment. Golden is entering his ninth NFL season which puts his base salary at $1.165 million. Golden was given the maximum signing bonus of $152,500 yet his salary cap hit is the same as Armon Watts and Chandon Sullivan at $1,092,500. This gives the Steelers a salary cap savings of $225k based on the amount of salary Golden receive.

Four-Year Player Qualifying contracts

There is another type of salary benefit which can be used by teams but it’s not nearly as widespread as the Veteran Salary Benefit contract. In fact, a team can only use two of these contracts every year and the savings must be split between the two players if not given to just one.

Now enters the Four-Year Player Qualifying contract.

The qualifications for this contract are more stringent than what was covered above. In this case, a player must have played the previous four seasons with the same franchise with which they are signing their deal. The player had to be on the roster, or the Reserve/Injured List, for every game over those four seasons. In other words, if a player bounced on and off the practice squad they do not qualify.

For this type of contract, the player is actually earning more than the league minimum which is what they will be charged. With this contract, a player can receive a signing bonus up to the $152,500 just like the Veteran Salary Benefit contract. What makes this contract different is the player can be paid above their minimum salary for the number of credited seasons they have with that extra amount not counting against the salary cap. The amount of extra money the player can receive is up to $1.35 million, but this amount cannot exceed this amount combined for up to two players who receive this type of salary. Just like the signing bonus, these amounts go up every two seasons throughout the life of the current CBA.

More Steelers examples

The best way to understand this contract is by looking at one. In 2022, the Steelers used one Four-Year Player Qualifying contract and issued the full bonus amount to that player. Terrell Edmunds signed his deal where he was paid $2.385 million as a base salary, which was for $1.35 million above his $1.035 million minimum salary, and also received a $152,500 signing bonus. So despite paying Edmunds $2.5375 million in salary, he only counted $1.1875 millio against the salary cap as the $1.35 million difference was a “benefit.”

Some Steelers fans were surprised that Edmunds did not sign on for the same deal again for 2023 and instead signed a deal that would pay him up to $2 million with the Philadelphia Eagles assuming he appeared in every game. But it also appeared the Steelers could not offer Edmunds the full $1.35 million they had available as the benefit as they used one of the salaries on another player for 2023.

Zach Gentry has a contract that is a Four-Year Player Qualifying contract for 2023. He has a base salary of $1.2475 million for 2023 which is $167,500 more than his league minimum salary of $1.08 million. Along with his $152,500 bonus, Gentry is set to be paid $1.4 million this season but his cap number will only be $1.2325 million with the $167,500 being a benefit. Since the Steelers used a portion of the $1.35 million for Gentry, they only have the remaining amount ($1.1825 million) to offer to another player who qualifies.

In case you missed other parts of the series, they can be seen here: