MLS Salary Guide: How Pay Works in Major League Soccer
If you’ve ever wondered why some MLS stars earn big money while others earn far less, you’re not alone. The league uses a mix of caps, bonuses and special rules that can look confusing at first. This guide breaks down the basics so you can get a clear picture of how MLS salaries are set.
What’s the salary cap and why does it matter?
The MLS salary cap is a limit on how much a club can spend on its roster each season. In 2025 the cap sits around $5.9 million for the senior roster, plus a separate $1.7 million for the supplemental roster. Think of it as a budget that every team must follow – it keeps spending in check and makes the league more competitive.
Teams can’t just dump cash on every player. If they want to go over the cap, they must use special tools like Allocation Money or sign a Designated Player.
Designated Players: the big‑ticket exceptions
The Designated Player (DP) rule lets clubs add a few high‑profile stars without counting their full salary against the cap. In 2025 each team can have up to three DPs. Only a portion of a DP’s salary (roughly $650,000) counts toward the cap; the rest is paid by the club directly.
This is why you see names like Carlos Vela, Alejandro Pozuelo or Javier “Chicharito” Hernández on MLS rosters with salaries that dwarf the rest of the league. The DP rule is what lets MLS attract international talent while still protecting smaller market teams.
Aside from DPs, clubs use two main types of Allocation Money to shape their payroll:
- General Allocation Money (GAM): can be used on any player, to reduce a player’s cap hit, or to sign new talent.
- Targeted Allocation Money (TAM): is aimed at players earning more than the minimum salary but less than the DP threshold. TAM can push a player’s salary into a higher bracket without turning them into a DP.
These tools let clubs be creative. For example, a team might use TAM to sign a promising 22‑year‑old for $800,000, keeping the cap hit under the DP limit.
Another piece of the puzzle is the minimum salary. In 2025 the MLS minimum for senior players is $81,000, with a lower figure for supplemental players. New players coming from college or the MLS Next Pro league often start at this level before earning raises.
Now, let’s look at a real‑world scenario. The New York Red Bulls paid $5 million in 2023 to DP Luis Suárez. Only $650,000 of that counted toward the cap; the rest was covered by the club’s own budget. Meanwhile, a backup midfielder on a GAM‑adjusted contract might earn $600,000, but only $200,000 hits the cap after GAM is applied.
Why does all this matter to fans? Salary details can explain trade moves, roster cuts, and why a club might prioritize a youth academy over a pricey signing. When a team trades away a high‑salary player, they often receive GAM or TAM in return, giving them flexibility for future deals.
Finally, keep an eye on the league’s annual salary reports. MLS releases a “Salary Guide” each season, showing the cap, DP limits, and allocation money pools. Those documents are the most reliable source for up‑to‑date numbers.
In short, MLS salaries are a blend of caps, DPs, and allocation money that let clubs stay balanced while still bringing in star power. Understanding these rules makes it easier to follow transfer news, roster announcements and the overall growth of soccer in North America.
