Rules & penalties · Updated for 2026
The Formula 1 cost cap explained
How financial regulations limit specified team spending while excluding defined activities.
Quick answer
The cost cap limits categories of performance-related spending over a reporting period. It does not mean every dollar a team spends is included; the financial regulations define exclusions and adjustments.
The purpose
The cap aims to reduce unsustainable spending differences while allowing teams to decide how to allocate their permitted resources.
What headline numbers hide
Driver pay, certain senior salaries, marketing and other listed items may receive different treatment. Currency, inflation and calendar provisions can also matter.
Enforcement
Teams submit financial documentation for review. Penalties depend on the nature and severity of any breach under the current financial rules.