In 2023, MLS teams operated under a salary budget of $5,210,000 (up from $4.9 million in 2022), which governed their roster construction and player compensation. Each team could carry 28 players on their roster, with a maximum of 20 senior roster spots and up to 8 supplemental roster spots for younger players.
The Designated Player (DP) rule allowed teams to sign up to three players whose salaries could exceed the maximum budget charge, with only a portion counting against the salary cap. Teams also had access to General Allocation Money (GAM) and Targeted Allocation Money (TAM) to help manage player acquisitions and salary cap compliance.
Additionally, the U22 Initiative permitted teams to sign up to three players aged 22 or younger to contracts that would normally exceed the maximum budget charge, with reduced budget impact. Homegrown Players, developed through MLS academy systems, could be signed outside the normal roster and budget constraints, encouraging youth development across the league.