Major League Baseball (MLB) does not have a hard salary cap, instead employing a luxury tax that applies to teams whose total payroll exceeds certain set thresholds for a given season. Free agency did not exist in MLB prior to the end of the reserve clause in the 1970s, allowing owners before that time to wholly dictate the terms of player negotiations and resulting in significantly lower salaries.
Babe Ruth, widely regarded as one of the greatest baseball players ever, earned an estimated $856,850 ($ inflation-adjusted from 1934 dollars) over his entire playing career. When asked whether he thought he deserved to earn $80,000 a year ($ inflation-adjusted), while the president, Herbert Hoover, had a $75,000 salary, Ruth famously remarked, "What the hell has Hoover got to do with it? Besides, I had a better year than he did."
Pitcher Nolan Ryan was the first player to earn an annual salary above $1 million, signing a $4.5 million, 4-year contract with the Houston Astros in 1979. Kirby Puckett and Rickey Henderson signed the first contracts which paid an average of $3 million a year in November 1989. In 1990, Jose Canseco signed for 5 years and $23.5 million, making him the first player to earn an average of $4 million a year. It wasn't until 2010 when the average salary for all MLB players exceeded $4 million.
Alex Rodriguez signed two record-breaking contracts during his career. First, he signed a $252 million, 10-year contract with the Texas Rangers in December 2000 ($ inflation-adjusted from 2000 dollars). Baseball executive Sandy Alderson called the deal "stupefying," while Sports Illustrated noted that Rodriguez's early salaries under the contract ($21 million) would be greater than the annual payroll of the entire Minnesota Twins team that year ($15.8 million). The deal was the largest sports contract in history, doubling the total value of Kevin Garnett's $126 million National Basketball Association contract (the previous record holder) and more than doubling Mike Hampton's $121 million contract, the previous MLB record which had been signed just days before. The Rangers traded Rodriguez before the 2004 season to the New York Yankees for Alfonso Soriano, though Texas agreed to pay $67 million of the $179 million outstanding on the contract. Rodriguez then opted out of the remainder of his deal after the 2007 season and renegotiated a new $275 million, 10-year agreement with the Yankees, breaking his own record for the largest sports contract. Five of the 20 highest-paid players in 2013 were members of the Yankees. Their 2013 payroll was $228,835,490, roughly $12 million above the second-largest Los Angeles Dodgers. The Yankees have drawn criticism for their payroll, with some claiming it undermines the parity of MLB. From 2003 to 2024, the Yankees' payroll exceeded the luxury tax threshold every year except 2018 and 2021. Following 2020, the Dodgers and New York Mets have led the majors in payroll. The Dodgers signed Shohei Ohtani to a ten-year, $700 million contract before the 2024 season, though most of that money was deferred. Accounting for net present value, Juan Soto signed a larger contract with the Mets before the 2025 season, a 15-year, $765 million contract with no deferred money.
Key + KeyMember of the National Baseball Hall of Fame and Museum 1B First baseman 2B Second baseman 3B Third baseman SS Shortstop LF Left fielder CF Center fielder RF Right fielder C Catcher SP Starting pitcher RP Relief pitcher DH Designated hitter
Highest current annual salaries This table refers to the average annual salary for 2026, without considering signing bonuses or deferred payments.
RankNamePositionTeam(s)Salary1Shohei OhtaniDH/SPLos Angeles Dodgers$70 million2Kyle TuckerOFLos Angeles Dodgers$60 million3Juan SotoOFNew York Mets$51 million4Zack WheelerSPPhiladelphia Phillies$42 millionBo Bichette3BNew York Mets6Aaron JudgeOFNew York Yankees$40 million7Jacob deGromSPTexas Rangers$37 million8Blake SnellSPLos Angeles Dodgers$36.4 million9Gerrit ColeSPNew York Yankees$36 million10Vladimir Guerrero Jr.1BToronto Blue Jays$35.7 million
Top 10 career earnings Earnings up to date as of the end of the 2025 season. Name Team(s) Position Years Earnings Seattle MarinersTexas RangersNew York Yankees SS, 3B 1994–2016 $485.2 million Detroit TigersHouston AstrosNew York MetsSan Francisco Giants SP 2006–Present $409.3 million Florida MarlinsDetroit Tigers 1B, 3B, DH 2003–2023 $393.2 million Arizona DiamondbacksDetroit TigersWashington NationalsLos Angeles DodgersNew York MetsTexas RangersToronto Blue JaysSP2008–Present $345.1 million St. Louis CardinalsLos Angeles AngelsLos Angeles Dodgers 1B, 3B, OF, DH 2001–2022 $341.8 million Kansas City RoyalsMilwaukee BrewersLos Angeles AngelsLos Angeles DodgersArizona DiamondbacksHouston Astros SP 2004–2023 $328.5 million Los Angeles Dodgers SP 2009–2025 $314.7 million Los Angeles Angels OF 2011-Present $303.2 million New York Yankees SS 1995–2014 $266.3 million Cleveland IndiansMilwaukee BrewersNew York Yankees SP 2001–2019 $265.0 million
Salary progression
This list documents the progression of the highest average annual value contracts/contract extensions. Average annual salary Date signed Name Team Position Contract duration(Years) Ref(s) $ Boston Red Sox OF $ Chicago White Sox 1B $ New York Yankees SP $ California Angels 1B $ Houston Astros SP $ New York Yankees RF 10 $ Baltimore Orioles 1B $ Los Angeles DodgersSP $ Kansas City Royals SP $ Minnesota Twins CF $ California Angels SP $ Kansas City Royals SP $ Oakland Athletics SP $ San Francisco Giants 1B $ New York Yankees 1B $ Oakland Athletics RF/DH $ Boston Red Sox SP $ New York Mets 3B/RF $ Chicago Cubs 2B $ San Francisco Giants LF $ Seattle Mariners CF $ Chicago White Sox LF $ San Francisco Giants LF $ Atlanta Braves SP $ Boston Red Sox SP $ New York Mets C $ Anaheim Angels 1B $ Los Angeles Dodgers SP $ New York Yankees SP $ Toronto Blue Jays 1B $ Texas Rangers SS 10 $ New York Yankees 3B 10 $ Los Angeles Dodgers SP 7 $ Detroit Tigers 1B 8 $ Arizona Diamondbacks SP 6 $ Los Angeles AngelsCF12 $ New York YankeesSP9 $ New York MetsSP3 $ Los Angeles DodgersDH/SP10$New York MetsOF15$Los Angeles DodgersOF4
See also
Highest-paid NBA players by season List of player salaries in the NHL List of highest-paid American television stars List of highest-paid film actors List of salaries
Notes Under this deal, Rodriguez would also receive $6 million bonuses when he tied the career home run totals of Willie Mays (660), Babe Ruth (714), Hank Aaron (755), and Barry Bonds (762), as well as for breaking Bonds' record. Rodriguez finished with 696 home runs, only getting a bonus for matching Mays. "Earnings" as discussed here refers to salaries paid to players under MLB contracts and does not include advertising or other sources of income. All values are listed in nominal dollars. "Average annual value" is calculated as the total value of a contract (less bonuses) divided by the number of years. A $20 million, 2-year contract would have an average annual value of $10 million, even if the player actually received $9 million one season and $11 million in the other. This also does not include contracts for less than a season prorated in value for a full season such as Roger Clemens' 2006 and 2007 contracts. Contract values are listed in nominal dollars unless they include deferred payments at signing. Dave Winfield initially negotiated a 10-year deal in 1980 worth a projected $25 million ($2.5 million per year). However, Yankees owner George Steinbrenner reportedly had not fully understood a cost of living adjustment provision in it and the 10-year contract was renegotiated a few months later. The final precise value is unclear, although it fell between $20 and $25 million in total value ($2–2.5 million a year). Hershiser and Frank Viola both won the 1988 Cy Young Award, and Viola signed an identically sized $7.9 million, 3-year contract two months after Hershiser. Rickey Henderson signed a $12 million, 4-year contract with the Oakland Athletics on November 28, 1989, 6 days after Puckett signed his $9 million, 3-year contract. Roger Clemens signed a contract extension during the 2000 season covering 2001 and 2002 along with a player option for 2003. Clemens was paid $10.3 million each year for 2001 and 2002, with the same $10.3 million available if he elected to play in 2003 under his option. However, Clemens also received $10.3 million if he rejected the option. As a result, he could effectively collect the full $30.9 million of contract value for only two years of play ($15.45 million annually). However, the Yankees valued this deal as a $10.3 million annually, three-year deal. He became a free agent after the 2002 season and ultimately re-signed with the Yankees for a new, one-year contract in which they bought out the previous option. Shohei Ohtani signed a $700 million, 10-year contract with the Dodgers. He will receive $2 million a year for ten years and then $68 million a year for the following ten years. Because of this, the net present value is lower than $70 million per season. Kyle Tucker signed a $240 million, 4-year contract with the Dodgers. The contract includes $30 million deferred, so the net present value is lower than $60 million per year.
References