Under the radar, the Dallas Cowboys saw a remarkable increase in their 2025 cap space on Wednesday, expanding by over 3%. When the NFL set the salary cap ceiling for 2025, the Cowboys knew they had some additional wiggle room. Dallas was carrying over a ton of unused space from 2024, around $18 million worth, which meant they already were operating with available space above the league’s $279.2 million number.

Dallas entered 2025 with $297 million in cap space, but on Wednesday it ballooned to $306 million, an increase of $9 million. Why? Because they were really bad in 2024. Allow us to explain.

The way the salary cap works is pretty convoluted, but it can be broken down like this. Every player who is on the active roster counts towards the cap based on three factors: Base salary, bonus money and incentives. Base salary is straight forward. It’s how much the players make across the regular season’s 18 weeks. Bonus money can come in various forms. Signing bonuses, option bonuses, and restructure bonuses all essentially work the same way. The money is paid to the player on a certain day, but the team can spread the cap hit for that money across several years (up to five). The final cap hit, incentives, is what is the reason for the sudden influx of Cowboys’ cap space.

The NFL counts incentives such as sack bonuses, game-day bonuses, extra money for rushing for 1,200 yards in two ways, likely-to-be-earned (LTBE) or not-likely-to-be-earned (NLTBE). LTBE incentives simply mean the player reached that threshold the previous season. NLTBE means he didn’t.

Say Micah Parsons gets a $1 million sack bonus if he gets 12 sacks in a season. Because Parsons had 14 sacks in 2023, that incentive would be LTBE. If an incentive is LTBE, then it counts towards the team’s salary cap. If it’s NLTBE, then it doesn’t.

But at the end of each season, the league goes through and tabulates all of the amounts. If a player had a LTBE incentive they didn’t reach, the team regains the cap space that was withheld on the following year. If a NLTBE incentive was actually reached, then it’s deducted from the next year’s cap.

On Wednesday, the NFL made all of those adjustments, and because the Cowboys had a ton of players who missed those game-day totals, and stat milestones, they added a whopping $8.944 million of cap space for 2025.

The total was the third-highest adjustment in the league, behind the San Francisco 49ers ($12,163,918) and the New York Giants ($10,091,798).

Now while it’s unknown to the public how much each team is going to be adjusted, the club’s themselves know this and plan for it. Every team’s accounting group keeps a spreadsheet of player incentives and tracks their performance throughout each year. There were no surprises to Stephen Jones, Cowboys executive VP, but it’s still a bump to their offseason, the same way the confirmation of four compensatory picks were the day prior.

The Cowboys had a ton of money committed to the 2025 cap, over the league’s amount, so they clearly went about 2024 with the intention of carrying over created even more room to play with when they restructured the contracts of QB Dak Prescott and wideout CeeDee Lamb; two planned maneuvers that gave them another $56 million in cap space above the $4 million they had originally.