This really need to be stickied because it is asked every year. You do a great job breaking it down.
Originally Posted by TMJOHNS18
The bonus is divided evenly over the entire contract. If the player has a total bonus of $5M, then it's payed out $1M/year. The Bonus + Salary equals the total contract, so yes, bonus counts against the cap. Go to the salary screen to see their total bonus.
Let's say you resign a player, and on the screen it says:
SAL - $4M
Bonus - $1M
Years - 4
Total - $20M
You are paying an average of $5M to the player per year for 4 years, and every year $1M of the cap hit is from his bonus.
If you cut the player in year one, you'll have a penalty of $1M year one (current year's bonus) and $4M in year two (the remaining bonus). If you cut him year two, he'll have a $1M penalty year two and a $3M penalty year three. Bonus is paid during the entire length of the contract (the guaranteed portion).
Be careful when cutting guys with large bonus's early in their contracts, as you will probably have a net loss (you pay more than you free up). Better to stick with them until their salary outweighs their remaining bonus.