Competitive Balance Tax

The Competitive Balance Tax (CBT) threshold will be $230M on 2022, $233M in 2023, $237M in 2024, $241M in 2025, and $244M in 2026. 

CALCULATING A CLUB'S COMPETITIVE BALANCE TAX (CBT) LIABILITY

For the purpose of calculating a club's CBT liability, a club's MLB payroll consists of the Average Annual Value (AAV) of player salaries and bonuses earned by players on the club's MLB Reserve List (40-man roster) and MLB 60-day Injured List. 
CoViD-19 EXCEPTION: A club's 2020 MLB payroll is the value of the aggregate contracts prior to salaries being pro-rated due to the truncated season.  

In addition, MLB Player Benefit Costs (PBC) and the AAV of "legacy salaries" paid to players who are no longer on the club's MLB 40-man roster (such as a player who has been released or outrighted to the minors, or who is being paid a deferred salary after becoming a free-agent) are considered to be part of the club's payroll when calculating the CBT.   

FINANCIAL PENALTIES FOR EXCEEDING COMPETITIVE BALANCE TAX

A club whose payroll from the just-concluded MLB season exceeded the CBT threshold will pay a 20% tax on the portion of the payroll that exceeded the CBT threshold, a club whose payroll from both the just-concluded MLB season as well as from the MLB season immediately prior to the just-concluded MLB season exceeded the CBT threshold will pay a 30% tax on the portion of the payroll from the just-concluded MLB season that exceeded the CBT threshold, and a club whose payroll from the just-concluded MLB season as well as from the two MLB seasons immediately prior to the just-concluded MLB season exceeded the CBT threshold will pay a 50% tax on the portion of the payroll from the just-concluded MLB season that exceeded the CBT threshold. 

A club whose payroll from the just-concluded MLB season exceeded the CBT threshold by more than $20M will pay an additional surcharge of 32% on the portion of the club's payroll in excess of $20M over the threshold the first time, an additional surcharge of 42% if a club exceeds the CBT threshold by more than 20% two consecutive seasons, and an additional surcharge of 62% if a club exceeds the CBT threshold three consecutive seasons.

A club whose payroll from the just-concluded MLB season exceeds the CBT threshold by more than $40M will pay an additional surcharge of 62.5% on the amount of the payroll in excess of $40M over the CBT threshold, an additional surcharge of 75% on the amount of the payroll in excess of $40M over the CBT threshold if a club exceeds the CBT threshold by more than $40M for two consecutive seasons, and a 95% surcharge on the amount of payroll in excess of $40M over the CBT threshold if a club exceeds the CBT threshold by more than $40M for three consecutive seasons. 

A club whose payroll from the just-concluded MLB season exceeds the MLB CBT threshold by more than $60M will pay an additional surcharge of 80% on the amount of payroll in excess of $60M over the CBT threshold, an additional surcharge of 90% on the amount of payroll in excess of $60M over the CBT threshold if a club's payroll is more than $60M over the CBT threshold for two consecutive seasons, and a 105% surcharge on the amount of payroll in excess of $60M over the CBT threshoild if a club's payroll is more than $60M over the CBT threshold for three consecutive seasons.

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  • Childersb3 3 hours 56 min ago (view)

    Phil,

    I apologize for not being knowledgable enough to find this answer on my own, but when is the earliest date that Alec Mills can come off the 60 day IL? I know he can have a long rehab as well, so my second question is what is his latest date he could come off the 60IL? So, what's his return date range? I trying to figure out if it's even 40man roster possible/plausible for Kilian to get added to 40 to pitch next Monday vs Brewers.

    Any help here would be greatly appreciated!

     

  • Cubster 4 hours 56 min ago (view)

    KB is back on the IL with exacerbation of the same low back injury. Sigh. 

     

  • DavidP 16 hours 9 sec ago (view)

    Phil - it is obvious that Christian Hernandez is tearing things up, and altuve and Balistros look promising, but has there been any others that have surprised you among the pitchers or the rest of the offense down there?

     

  • crunch 18 hours 22 min ago (view)

    this reds team is so hopelessly terrible they have mahle out there in the 5th with 100+ pitches, 6 runs given up, and no outs yet.

    ...and he's done with 103 pitches, leaving with 0 outs and men on 1st/2nd

     

  • crunch 18 hours 32 min ago (view)

    nice.

    i was looking forward to the hoerner/madrigal "hoes mad" middle IF.

     

  • Cubster 19 hours 34 sec ago (view)

    Schwizdom?

     

  • crunch 19 hours 40 min ago (view)

    "nice first inning." - cubster

    "yeah, okay, whatever.  hold my beer." - stroman

     

  • Cubster 19 hours 55 min ago (view)

    Nice first inning. Gomes out with oblique strain, Schwindel is today's backup catcher.

     

  • crunch 20 hours 6 min ago (view)

    small sample size blah blah etc...

    watching morel is like flashing back to 2016-era cubs and their joy + aggression on the field.  he would have fit in well with that cubs era.

     

  • crunch 20 hours 10 min ago (view)

    pre-game lineup shakeup...yan gomes scratched (left oblique tightness) and lineup rearranged.

    morel leading off, ortega moves to hitting 2nd, and schwindel 5th

     

  • crunch 22 hours 29 min ago (view)

    may 24th...

    our leadoff hitter has a .315 ob% and the #2 hitter is sporting a solid .262 ob%

    121 games to go.

    season ends with 6 in a row vs CIN.  i dunno if anything in the dumpster will be left to keep a flame going.  sad thing is by that point it may actually be better quality baseball.

     

  • Hagsag 1 day 9 hours ago (view)

    Phil, does Rafael Morel have some potential to join his big brother?

     

  • tim815 1 day 10 hours ago (view)

    You answered your own question. Trades create promotions. Other things might not.

     

  • Arizona Phil 1 day 14 hours ago (view)

    Like the ACL, the Dominican Summer League (DSL) Opening Day will be June 6th, and also like the ACL, the DSL regular season concludes on August 23. All DSL games will be played in the morning. The Cubs will once again be running two teams (Red and Blue), with a maximum of 35 players on each squad. DSL games will be played Monday through Saturday with Sundays off, and a few Wednesdays will be off days as well. 60 games total in DSL (ACL teams play 55, because they have all Wednesdays off). 

     

  • K Dub 1 day 16 hours ago (view)

    AZ Phil is not only an intrepid reporter who will allow nothing to stop his coverage of Cubs complex baseball, but he's also a reknown wordsmith. In his lastest article, Phil employed 10 different ways to describe the impact of bat to ball while repeating nary a one. 

    In order: blasted, drilled, blooped, belted, hammered, crushed, roped, laced, slugged and ripped. 

    Good work outta you, young man. Your English teachers would be proud.

     

  • JoePepitone 1 day 17 hours ago (view)

    Only five more wins to tie, six to blow past Kenny.