The cost cap in Formula 1 is going through some changes. They plan to increase the cap from $135 million to about $220 million. Some things that were not counted before, like maternity leave and staff entertainment, might have been added, but teams didn’t like this idea.
Teams were worried that if maternity leave and entertainment were included in the cost cap, it might stop them from hiring women. They also thought it could make it hard for teams to decide between spending money on staff fun or on improving performance.
Now, the FIA, which oversees Formula 1, has decided that maternity leave and entertainment will not be part of the cost cap in 2026, just like before. Federico Lodi from the FIA said that all the teams agreed on this decision.
The FIA and the teams are still talking about the cost cap. They’re trying to figure out exactly how much the cap will be and what expenses will be included or excluded.
They also need to decide how to handle capital expenditure allowances and depreciation. They might change the rules so that depreciation and amortization of fixed assets are counted in the cost cap, and they might remove the capital expenditure allowance.
Some people might think that increasing the cost cap means teams can spend more money, but that’s not true. They’re just changing what counts as part of the cost cap to make things simpler.
Lodi said, “We don’t want the overall cost cap to go up. We’re just adjusting it to include more things while keeping it strong. One way we’re simplifying things is by reviewing what costs can be excluded from the cap and including more costs instead, but we’re keeping the total cap the same.”
