Payroll Room

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Payroll Room is a term that originated in 2005 with the National Hockey League's new Collective Bargaining Agreement which was negotiated followong a season-long lockout. The new CBA includes a salary cap (formally titled the Upper Limit of the Payroll Range in the agreement). Payroll room is often called cap room in the media.

It simply refers to how much money in a team's salary cap is left over in order to acquire players, whether such players are signed as free agents or join the team via a trade or waivers.

A team can increase its cap room if it trades high-salary ice-hockey players to other teams and get lower-paid players in their place. A team cannot trade its cap room to another team or defer its cap room to subsequent seasons. Other practices once common in the NHL, such as exchanging cash for players or agreeing to pay a portion of a player's remaining salary after trading him, have been explicitly forbidden in the new CBA to try and prevent wealthier teams from evading the restrictions of the cap.