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How do we calculate cap space?

Please note the following description only applies to seasons not currently in play. Our in-season tracker involves more complexity.

When the bonus cushion is in effect, cap space, as referenced in features such as the cap calculator and charts, is equal to the salary cap's upper limit, plus potential performance bonuses to a maximum of 7.5 percent of the upper limit, minus cap payroll. Potential performance bonuses are the maximum earnable for the specified season. When the bonus cushion isn't in affect, cap space, as referenced in features such as the cap calculator and charts, is equal to the salary cap's upper limit minus cap payroll.

Cap payroll is equal to the sum of all cap hits on a team's roster, in addition to the sum of any buyouts and deferred bonuses (if applicable). A player's cap hit is equal to [ (total salary plus total bonuses) divided by length of contract ].