As IPL 2026 gears up for another high-stakes mini-auction, one of the most common points of confusion among fans is the difference between the auction purse and the salary cap. While both relate to franchise spending, they serve very different purposes in the league’s financial structure.

Auction Purse: The money available on auction day

The auction purse is the amount each franchise has at its disposal to buy players specifically at that auction.
This purse is calculated after teams decide which players to retain, release, or trade ahead of the auction. The remaining balance becomes the amount they can bid with.

For example, ahead of the IPL 2026 mini-auction, teams entered with different purse sizes because their retention strategies and previous contract values varied widely.

Salary Cap: The total spending limit for the entire squad

The salary cap is the maximum amount a franchise is allowed to spend on all its players combined for the entire season.
This includes retained players, traded players, and newly purchased players at the auction.

It is a league-wide rule designed to maintain competitive balance and prevent overspending.

Simple difference

• Auction purse = Money available only for bidding at the auction.
• Salary cap = The total permissible budget for paying the entire squad for the season.

Both are but operate at different stages of team-building. While the auction purse controls how teams behave on the auction tablethe salary cap governs the overall financial structure of the squad.