Formula 1 · FIA 2026

F1's cost cap limits defined team costs, not everything a team spends.

Published 26 June 2026

Quick ruling: under FIA 2026 Formula 1 Financial Regulations for F1 Teams, Section D, Issue 07, a team must keep its Relevant Costs within US$215 million for a full-year reporting period in which 24 or fewer Competitions take place. Each Competition above 24 adds US$1.8 million. Exclusions and accounting adjustments decide the final Relevant Costs figure. Separate 2026 Operational Regulations restrict aerodynamic testing and factory work even when a team could afford more.

Calculate the cap Aero limits

Scope

The ruleset and effective version used here

This page applies to entrants in the 2026 FIA Formula One World Championship. The financial baseline is Section D, Issue 07, dated 25 June 2026 and in force for reporting periods beginning on or after 1 January 2026. Aerodynamic testing and shutdown rules come from Section F, Issue 10, dated 5 August 2026. Track running outside a Competition is identified separately under Section B, Issue 08, dated 5 August 2026.

These are FIA Formula 1 rules, not a general rule for Formula 2, Formula E, IndyCar or another championship. FIA Determinations can also prescribe binding accounting methods where Section D authorises them; public guidance and team-specific feedback are advisory, while the Cost Cap Adjudication Panel and ultimately the International Court of Appeal decide disputed interpretations.

Three different controls

Money, activity and track running are separate tests

Financial: Section D Articles D4-D6 convert the Reporting Group's accounts into Relevant Costs and compare them with the Cost Cap.
Operational: Section F Articles F3-F5 restrict shutdown activity, aerodynamic testing and power-unit test-bench use.
Sporting: Section B Article B11 controls when and how F1 cars may run outside a Competition.

Passing one test does not satisfy the others. An excluded property cost can still support work prohibited during a shutdown; affordable wind-tunnel work can still exceed ATR; and track testing does not become legal merely because its cost fits under the cap.

Cost cap

How the 2026 team cap is calculated

Section D does not ask whether total cash expenditure was below a headline number. It defines a reporting perimeter, removes listed Excluded Costs, makes prescribed adjustments and then compares the resulting Relevant Costs with the cap.

D4.1.2

US$215 million for 24 or fewer Competitions

The base applies to the full-year reporting period. For more than 24 Competitions, add US$1.8 million for each additional Competition. The published 2026 illustration converts US$215 million at the Initial Applicable Rate to £170.090 million, €198.663 million or CHF189.992 million for teams using those Presentation Currencies.

Full yearDefined currency rate

D4.2

The Reporting Group reaches beyond the entrant

The team is included. If it incurred less than 98% of its Legal Group's F1 Activities costs, further group entities are added in descending cost order until the group reaches at least 98%, subject to the specified exclusions. Relevant F1 costs outside that group must still be recharged or adjusted into Relevant Costs.

98% testGroup entities

D5-D6

Exclusions are followed by adjustments

A listed exclusion removes a cost only on the regulation's terms. Adjustments then prevent accounting treatment or group transactions from understating F1 activity: for example, a related-party F1 transaction is included at the higher of contracted cost and Fair Value.

Excluded CostsRelevant Costs

Usually relevant

Car development cannot be deferred out of the period

Article D1.2 describes the cap as covering certain costs of operating the team and developing, manufacturing, testing and racing F1 cars. Articles D6.1.1.c-e then control when important development costs are recognised:

Research and development: F1 R&D is included in the period in which it is incurred, even if ordinary accounts defer it.
Capitalised car costs: capitalising F1 car expenditure does not postpone it for cost-cap purposes.
Inventory: a used item is generally expensed in full when first used for a current or future F1 car; unused and redundant items follow their own rules.
Related and inter-team transactions: F1 activity is adjusted under D6, including the higher-of-cost-or-Fair-Value rule and FIA-prescribed methods for Transferable Components.

Major exclusions

The cap is not total team expenditure

Article D5.1.1 contains a long, exact list. Important 2026 exclusions include:

Drivers and senior personnel: F1 driver consideration and their travel and accommodation; other racing-driver and academy-program costs; and consideration, employer social-security contributions, travel and accommodation for the three qualifying highest-paid non-driver individuals.
Business categories: costs directly attributable to Marketing Activities, Human Resources Activities, Finance Activities or Legal Activities; Finance Costs; Corporate Income Tax; and Property Costs.
People and welfare: mandatory employer social-security contributions, qualifying parental or indefinite sick/disability leave, Health and Safety Costs, and employee bonuses only up to D5's stated ceiling.
Championship operation: specified FIA and commercial-rights-holder payments, FIA fines, power-unit supply costs up to the permitted price, and defined travel, hotel and catering costs.
Separate activity: qualifying heritage, sustainability and genuinely Non-F1 Activities, subject to attribution and proof requirements.

“Excluded” is therefore not shorthand for “anything a team labels marketing, property or another project.” Where the article requires direct attribution, an identifiable portion or proof satisfactory to the Cost Cap Administration, that condition matters.

Decision path

How to analyse a disputed team expense

Name the reporting period and cap. Start with US$215 million for 24 or fewer Competitions, adding US$1.8 million only for each Competition above 24.
Identify who incurred the cost. Apply the D4.2 Reporting Group and outside-group recharge rules.
Classify the activity. Decide whether it is an F1 Activity and whether D5 expressly excludes it.
Apply the conditions. Direct attribution, ceilings, evidence and split-use rules can determine how much is excluded.
Make D6 adjustments. Fair Value, R&D timing, inventory and other required treatments can change the accounts figure.
Compare Relevant Costs with the Cost Cap. Total business spending alone does not answer the compliance question.
Check the activity rules separately. Section F or B may prohibit or ration the work regardless of its financial treatment.

Worked case — a 25th Competition: if 25 Competitions actually take place in the 2026 full-year reporting period, D4.1.2 makes the dollar cap US$216.8 million: US$215 million plus one US$1.8 million increment. A cancelled event that does not take place does not activate that increment.

Worked case — total spending above the cap: assume a team presenting in US dollars records US$230 million of total costs, of which US$20 million is F1 driver consideration qualifying for exclusion under D5.1.1.b, and no other exclusion or adjustment applies. Its Relevant Costs for this simplified example are US$210 million, so total costs above US$215 million do not by themselves establish a breach.

Aerodynamic Testing Restrictions

ATR rations wind-tunnel and CFD development by championship position

Section F Article F4 treats testing by the team, an Associate, contractor or outside entity for the team's benefit as Restricted Aerodynamic testing when it uses a physical or digital F1 car geometry to assess aerodynamic effects. Outsourcing the work does not create another allowance.

Six periods

Limits apply in each ATP

F4.1.4 divides the year into six consecutive Aerodynamic Testing Periods. ATP1 runs from 1 January to the end of week 9; ATP2, ATP3 and ATP5 last eight weeks; ATP4 lasts ten weeks and includes the summer shutdown; ATP6 ends on 31 December.

No gapsFIA may revise exceptionally

100% allowance

One ATP baseline has five measures

At coefficient C=100%, F4.6.1 permits 320 restricted wind-tunnel runs, 80 wind-on hours and 400 occupancy hours, plus 2,000 new three-dimensional RATGs used in Restricted CFD Simulations and 6 MAUh of solver compute.

RWTTRCFD

Sliding scale

First gets 70%; tenth or a new team gets 115%

The coefficient is 70%, 75%, 80%, 85%, 90%, 95%, 100%, 105%, 110% and 115% for positions 1 through 10 respectively; 10th or lower and a New Team use 115%. Each measure is multiplied by that coefficient.

5-point stepsPosition based

When rank is judged

The ATR order resets after the third period

For ATP1-ATP3, F4.6.1 uses the team's final Constructors' Championship position from the previous year. For ATP4-ATP6, it uses the current Constructors' Championship position at the end of the last day of ATP3. If later result revisions change that order, the FIA can require revised limits from the next ATP and may direct how over-use or under-use is absorbed.

Worked example under FIA Section F Issue 10: a first-placed team at 70% receives, for a full ATP, 224 runs, 56 wind-on hours, 280 occupancy hours, 1,400 new CFD RATGs and 4.2 MAUh. A team at the 100% coefficient receives 320, 80, 400, 2,000 and 6 respectively. The decisive fact is the applicable Constructors' position at the relevant reset, not the team's budget or race result on the day it tests.

How a run is counted

Wind-tunnel limits measure different things

Under F4.2, a restricted run begins when tunnel air speed rises above 5m/s and ends when it next falls below 5m/s. Wind-on time counts while speed exceeds 15m/s. Occupancy is measured in declared shifts, with no more than two shifts in a calendar day. The model geometry must remain fixed while the speed is above 5m/s and until it falls below 1m/s.

Restricted wind-tunnel testing normally uses one FIA-nominated tunnel in a twelve-month period. F4.3 also caps model scale at 60% and tunnel speed at 50m/s. These are operating constraints, not merely bookkeeping labels.

ATR boundaries

Some tests are outside ATR, but only on stated conditions

Competition and permitted track testing: aerodynamic testing by an F1 car at a Competition or during track testing under Section B Article B11 is not ATR, although B11 still controls the running.
Power-unit and dynamometer work: specified heat-exchanger and power-unit-flow tests, and qualifying engine-dynamometer work without front or rear wing assemblies and without aerodynamic-force or flow-field measurement, are outside ATR.
Brake, wheel, tyre and instrument work: the stated exceptions apply only where the test does not also provide bodywork performance or endurance knowledge.
Tunnel infrastructure: conditioning or methodology work can avoid the run, wind-on and occupancy totals only with the prescribed wing removal or FIA-approved covers, or with an unmodified geometry more than 12 months old or supplied by the FIA.

F4.5 expressly brings bodywork development back inside ATR even where no aerodynamic-force measurement is taken. The purpose and information produced by the test matter.

Records and over-use

The FIA can trace geometry, compute and tunnel activity

Teams report RWTT and RCFD details within 14 days after each ATP. They must retain timestamped tunnel images and traceable CFD meshes and data; the FIA may arrange independent benchmarking inspections.

F4.6.10 does not treat an excess as a free choice followed by a normal fee. The FIA reduces later ATR limits by at least ten times the over-use, without prejudice to further action. The regulation's own example turns five excess runs against a 320-run limit into a next-period reduction from 320 to 270 runs.

Factory shutdown

Two shutdowns stop defined development work

Section F Article F3.1 requires a summer shutdown of 14 consecutive calendar days in July and/or August, reduced to 13 days if two consecutive Competitions in that period are only 17 days apart, plus nine consecutive days starting on 24 December.

During those periods the team, its affiliates and instructed suppliers may not operate a wind tunnel or CFD resource, produce or develop tunnel parts, car parts, test parts or tooling, assemble cars or parts, or perform design, development or production work, except as F3.1.4 permits. Examples include FIA-agreed repairs to a car seriously damaged at the preceding Competition, non-F1 tunnel or compute projects, facility and IT maintenance, show-car work that uses no current car parts, and circuit preparation for the immediately following Competition. Teams must notify suppliers and may not arrange work to circumvent the shutdown.

Enforcement

A cost-cap finding comes after reporting and review

Submit: D7 requires full-year Reporting Group and financial documentation, declarations and an independent audit firm's assessment report; interim documentation is also required.
Declare: the Team Principal, CEO, CFO and Technical Director sign the prescribed declarations, with an Ultimate Controlling Party declaration for full-year Reporting Group documentation.
Review: the Cost Cap Administration can request information, inspect records, use reliable evidence, monitor transactions and investigate suspected non-compliance.
Resolve or adjudicate: a Procedural Breach or Minor Overspend may be settled by an Accepted Breach Agreement if offered and accepted. A Material Overspend or Non-Submission Breach must be referred to the independent Cost Cap Adjudication Panel.
Appeal: panel decisions can generally be appealed to the FIA International Court of Appeal; accepting an ABA includes waiving a challenge to that agreement.

Breach categories

Less than 2% is “minor”; it is not permitted

Procedural Breach: a breach that is not an Overspend or Non-Submission Breach, including examples such as late, incomplete, inaccurate or misleading compliance material.
Minor Overspend Breach: Relevant Costs exceed the Cost Cap by less than 2%. D10.3.2 requires a Financial Penalty and any appropriate Minor Sporting Penalties.
Material Overspend Breach: Relevant Costs exceed the Cost Cap by 2% or more. D10.3.4 requires a Constructors' points deduction and also a Financial Penalty and other appropriate Material Sporting Penalties.
Non-Submission Breach: the panel must impose a Constructors' points deduction and may add a fine or other Material Sporting Penalties.

Worked case under Section D Issue 07: with a US$215 million cap, Relevant Costs of US$216 million are a US$1 million overspend, which is less than 2% and therefore a Minor Overspend Breach. It is still a breach. At 2% or more, the case falls into the Material category and the mandatory consequences change.

The available sporting sanctions in D12 include championship-points deductions, suspension from stages or whole Competitions, testing limitations, Cost Cap reduction and, for material cases, exclusion from the Championship. The regulations do not prescribe one automatic tariff for every case; sanctions are selected case by case with aggravating and mitigating factors.

Common misunderstandings

Three shortcuts that produce the wrong answer

Most cost-cap arguments fail because they skip either the accounting perimeter or a separate operational restriction.

“All spending”

The cap applies to Relevant Costs

Driver consideration, qualifying top personnel, Property Costs and other D5 categories can be excluded. A team's total accounts can exceed US$215 million without proving a breach.

D5 exclusionsD6 adjustments

“2% tolerance”

A minor overspend is still a breach

The 2% line separates Minor from Material Overspend Breaches. It is not a grace amount, and a minor case still requires a financial penalty if determined by the panel.

Below 2%Still sanctionable

“Outsource it”

Related entities and contractors do not create free capacity

D4-D6 capture relevant group and transaction costs, while F4 counts restricted aero work carried out by Associates, contractors or outside entities for the team's benefit.

Reporting GroupATR benefit test

Connected rules

Power-unit and track limits remain separate

An F1 Team that is also a Power Unit Manufacturer must comply independently with the team Financial Regulations and the separate power-unit manufacturer Financial Regulations. Section F Article F5 also contains power-unit test-bench rules. Those allowances are not extra team ATR.

For on-track running, use Section B Article B11 and the relevant category of car and event. See practice sessions and testing restrictions. For weekend setup controls, see parc ferme and car setup rules.

Official references

Governing-body sources and effective version

Checked on 26 August 2026 against Section D Issue 07 and the later Section F Issue 10 and Section B Issue 08. The FIA may amend these published sections and may issue binding Determinations under Section D; the regulations hub should be checked for a later issue before applying the figures to a later reporting period.