As reported earlier this week, as part of the planned review of the cost cap – which is likely to be expanded to around $220 million – other items that were previously exempt will be included in its scope.
One consideration was to move maternity leave and staff entertainment in-house, which not all teams welcomed.
Regarding maternity leave, it was felt that it might discourage teams from hiring women.
Regarding the entertainment aspect, there were concerns that it could serve to punish employees, as contestants would have to choose between keeping staff entertained and saving money on performance.
The FIA has now clarified that, as expected, teams that do not favor either element fall within the cost cap and will certainly remain exempt from 2026.
Federic Lodi, FIA head of single-seater financial regulations, explained: “During discussion with the teams, a number of exclusions were taken into consideration, including maternity/paternity leave and entertainment, to be included in the perimeter of the cost ceiling”.
An overview of the welcome event in the paddock
Photo by: Mark Sutton / Motorsport Images
“This was in exchange for a corresponding increase in the cost cap level that would allow teams to continue to fund maternity/paternity leave programs and entertainment events without any cost cap consequences.”
“But during the last meeting of the F1 Commission, it was unanimously decided that these costs must remain excluded from the scope of the cost cap.”
Discussions between the teams and the FIA on the cost cap are ongoing, as motorsport’s governing body works to finalize the regulations, both regarding the size of the cost cap and what that fits and what does not fit.
One aspect that needs to be worked out is where capital expenditure deductions fall and how depreciation is handled.
Lodi added: “A change to the treatment of these investments is currently being considered, with the planned inclusion of depreciation of fixed assets within the scope of the cost cap and the elimination of the deduction for capital expenditure.”
Because the cost ceiling is increasing
The expansion of the cost cap from the current $135 million to a projected level of $215-220 million could be interpreted by some as the FIA easing spending limits.
However, the change has nothing to do with teams having greater spending power. On the contrary, the shift in the global figure is due to the fact that it was deemed appropriate to include more elements within the scope of the spending ceiling to simplify things.
Lodi explained: “The FIA’s intention is to avoid an overall increase in the level of the cost cap, while considering the modification of the scope of exclusions, the increase in the number of races and the inflation rate in identifying the new level of the cost cap”.
All stakeholders agreed on the need to simplify the existing regulatory framework, while maintaining its robustness.”
“One of the levers identified to achieve simplification is the revision of the category of costs that can be excluded from the cost cap, with the aim of including a greater number of costs in the scope, in exchange for a corresponding revaluation of the overall level of the cost cap “.
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