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What is the F1 cost cap?
The cost cap is a limit on certain costs incurred by or on behalf of an F1 team during a full-year financial reporting period. It covers relevant spending connected with running the team and developing, manufacturing, testing and racing its cars. It is not a ceiling on a team’s entire budget, revenue, or every expense found in its accounts.
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The FIA’s 2026 Financial Regulations describe the purpose as limiting defined costs while leaving a team free to decide how to allocate resources within the cap. The stated aims include supporting the championship’s long-term viability and encouraging convergence in performance. The FIA Cost Cap Administration explains those aims and administers the compliance process.
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The rules discussed here are the team regulations in Section D, Issue 08, dated 1 October 2026. They apply to reporting periods starting on or after 1 January 2026. Power-unit manufacturers have a separate financial-regulation regime, with its own reporting and compliance requirements; their cap is not the F1 team cost cap. The FIA’s 2026 F1 team Financial Regulations are the controlling source for the figures and definitions below.
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How much can an F1 team spend under the 2026 cap?
For a full-year reporting period with 24 or fewer competitions, the 2026 regulations set a baseline of US$215 million. For every competition above 24, the baseline increases by US$1.8 million, subject to indexation. The applicable figure also depends on the rules’ currency-conversion method and other adjustments: the headline dollar amount is not necessarily the number a team uses in its presentation currency.
| Regulatory figure or example | What it means |
|---|---|
| US$215 million | Baseline for a full-year period with 24 or fewer competitions, subject to indexation and applicable adjustments. |
| US$1.8 million | Increase to the baseline for each competition above 24, also subject to indexation. |
| £170.090 million | Illustrative converted value in the regulations for the period ending 31 December 2026, assuming no more than 24 competitions. |
| €198.663 million | Illustrative converted value on the same regulatory assumptions. |
| CHF189.992 million | Illustrative converted value on the same regulatory assumptions. |
The currency figures are illustrations in the rulebook, not universal limits for every team, reporting period, or set of circumstances. The regulations require the team to determine and report Relevant Costs in its presentation currency and to stay within the applicable Cost Cap for the full-year period. That calculation incorporates the relevant rules on indexation and conversion; it is not simply a matter of multiplying the number of races by the printed dollar figure.
When comparing cap figures across seasons, separate the nominal baseline from the competition-count adjustment, indexation, currency conversion and changes to exclusions or adjustment methods. The FIA says the 2026 framework changed the perimeter of exclusions and adjustment methods while leaving the overall level effectively equivalent to the preceding level; this does not mean the printed nominal number stayed the same. The FIA’s World Motor Sport Council announcement summarizes those future-regulation changes.
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What spending counts as Relevant Costs?
“Relevant Costs” is the central concept. A team must identify the costs that fall inside the regulatory definition, apply the required adjustments and exclusions, and report the resulting amount. Accounting labels alone do not settle the question: what matters is the activity the cost relates to, who incurred it, how it is allocated, and whether the regulations permit an exclusion.
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The reporting group can include more than the race-team company
The reporting group is designed to capture entities that bear costs of the team’s F1 activities. It includes the team and, where needed, entities in its legal group until the included entities have incurred at least 98% of the relevant F1 activity costs. The rules also allow additional eligible entities to be included.
Consequently, a team cannot necessarily keep a cost outside the calculation just because a related company or another entity paid the invoice. Costs of F1 activities borne outside the reporting group generally have to be recharged to an entity in the group or brought in through a related-party adjustment. The scope is broader than the accounts of the racing-team legal entity alone.
Attribution matters when an entity has mixed activities
A company may perform both F1 and non-F1 work, or an employee may split time between activities. The regulations’ allocation rules determine what portion belongs in the calculation. For shared personnel, utilities and maintenance, a qualifying non-F1 activity does not automatically make the full shared cost excludable: the team must attribute the cost or establish an identifiable portion where the rule requires it.
This is why the cap is best understood as a reporting framework rather than a simple spending account. Classification, allocation, documentation and any required FIA determination all affect whether a particular amount is included. The exact treatment of an edge case depends on the relevant article and its conditions.
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What can F1 teams spend money on outside the cap calculation?
The regulations list costs excluded from Relevant Costs. These exclusions define the cap’s perimeter; they are not blanket permission to label spending in a convenient way. Each category is subject to its wording, attribution rules, conditions and, where applicable, evidential requirements.
| Excluded cost category | How to understand the boundary |
|---|---|
| Marketing | Costs directly attributable to marketing activities are excluded. The category depends on the activity and attribution, not merely on how a team describes an expense. |
| Driver compensation and related costs | Compensation for F1 drivers in exchange for driving services, plus their travel and accommodation, is listed. The rules also list compensation and travel or accommodation for other racing drivers, and management and operation of academy-program activities. |
| Three highest-paid qualifying individuals | Compensation for the three individuals with the highest aggregate consideration in the reporting group is excluded subject to the regulation’s conditions and carve-outs. |
| Heritage activities | Direct costs of heritage-asset activities are listed. Personnel costs qualify only where the team proves the identifiable heritage-related portion under the applicable rule. |
| Finance costs and corporate income tax | These specified costs are excluded from Relevant Costs. |
| Qualifying non-F1 activities | Costs attributable to qualifying non-F1 activity are listed, but shared personnel, utilities and maintenance need appropriate attribution or evidence for an identifiable portion. |
| Specified support functions and property | Direct costs of specified human-resources, finance and legal activities, as well as property costs, are listed as exclusions under the regulatory conditions. |
| Employee bonuses | Eligible bonus costs are capped at the lower of 20% of total fixed employee remuneration or the indexed excluded-bonus maximum. Related employer social-security contributions are also addressed by the rule. |
| Specified FIA and commercial payments | Specified FIA entry and participation fees, FIA Super Licence payments, and specified payments to the commercial rights holder are excluded. |
The table is a guide to categories, not a substitute for the detailed definitions. In particular, “marketing,” “heritage,” “non-F1,” and “support function” are not magic words that remove a cost from the cap. A team needs the right activity, an allocation consistent with the rule, and supporting records where required. The three-person compensation exclusion and bonus exclusion also have explicit boundaries; they should not be read as unlimited exemptions for all senior pay or employee incentives.
How does the FIA check the cost cap?
The FIA Cost Cap Administration (CCA) administers and monitors compliance. Teams must submit complete and accurate documentation and retain specified records. The CCA can review reporting, audit a team, investigate suspected non-compliance further, and take enforcement action. Its remit and official archive are described on the FIA Cost Cap Administration page.
In practical terms, the process depends on more than checking a final total against a threshold. The FIA must assess whether the reporting group is correct, whether relevant costs have been captured across entities, whether excluded amounts meet their conditions, and whether allocations and supporting documentation are adequate. An error in reporting can raise a compliance issue even if the team did not exceed the cap.
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The FIA said its review of the 2024 reporting documents took seven months. In its review published in 2025, it found nine F1 teams compliant and identified a procedural breach by AMR GP Ltd; it stated that AMR’s Relevant Costs remained below the cap. The same announcement separately reported that five power-unit manufacturers were compliant, a distinct scope that should not be counted as F1 teams. See the FIA’s review of compliance with the 2024 Financial Regulations.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.What happens if an F1 team breaks the cost-cap rules?
The regulations distinguish procedural breaches, late or non-submission breaches, and overspend breaches. Those categories matter: not every violation means that a team spent too much, and the consequences are not a single automatic fine for every case.
Minor and material overspend
A minor overspend is an amount less than 2% above the applicable cap. The adjudicating panel must impose a financial penalty and may also impose appropriate minor sporting penalties. A material overspend is 2% or more above the cap. In that case, the panel must impose a Constructors’ Championship points deduction and a financial penalty, and may impose other material sporting penalties.
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The regulations also authorize penalties in defined circumstances that can include a public reprimand, suspension from competition stages, limits on testing, and a reduction to a future cost cap. Aggravating and mitigating factors affect the outcome. Late and non-submission cases follow separate procedures and can result in a points deduction and other sanctions. The breach category and adjudication therefore matter as much as the headline percentage.
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A procedural breach is not the same as an overspend
AMR GP Ltd’s 2024 case illustrates the distinction: the FIA said its Relevant Costs were under the cap but that it had committed a procedural breach. The FIA’s accepted breach agreement said no financial penalty was levied in that case because the circumstances were exceptional and unpredictable. That outcome is specific to the agreement and circumstances; it does not establish that procedural breaches are generally penalty-free. The FIA published the accepted breach agreement concerning AMR GP Ltd.
That example also shows why a report that a team was “under the cap” does not by itself prove full compliance with every financial rule. Submission duties, records, allocation methods and other procedural requirements are separate elements of the framework.
How to read cost-cap numbers and breach reports
- Check the reporting period. The 2026 team rules apply to periods starting on or after 1 January 2026; a figure for another period may follow a different applicable rule.
- Check the competition count and adjustment. The 2026 baseline uses 24 competitions as the threshold and adds an indexed amount for each competition above it.
- Check the currency and conversion basis. The regulation’s converted examples are illustrations for a stated reporting period, not interchangeable universal limits.
- Check what is being reported. A cap applies to Relevant Costs after the reporting-group, allocation, exclusion and adjustment rules, not to every item of company expenditure.
- Separate team and manufacturer findings. FIA counts for teams and power-unit manufacturers refer to different regulatory scopes.
- Identify the breach type. A procedural or submission breach is not proof of overspend; for an overspend, distinguish the under-2% minor category from the 2%-or-more material category.
For a specific cost or case, the relevant article of the current regulations controls. The FIA’s published summaries explain outcomes, but a headline cap number or brief compliance announcement cannot replace the definitions and conditions in the rulebook.
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