The FIA has introduced a cost cap offset in Formula 1's 2026 financial regulations, due to the Sauber team's higher salaries in Switzerland.
Sauber, to become the works Audi team in 2026, has long argued its staff costs are a big disadvantage as it fights to become competitive due to the much higher wages and cost of living in Switzerland compared to its rival teams in the UK and Italy.
It therefore pushed for the new regulations to include an offset for teams operating in countries with higher salary levels than the UK or Italy.
According to figures from the Organisation for Economic Co-Operation and Development (OECD), the average wage in Switzerland in 2022 was $80,000 compared to $54,000 in the UK, where most other teams are based. That means, since the introduction of the cost cap, the Hinwil-based team has dealt with significantly less headroom to spend resources on performance and car development.
The FIA has now agreed that Sauber's situation is not fair and will work on a cost cap offset from 2026 based on OECD salary data, which has been incorporated in the latest version of the financial regulations.
Speaking to Nikolas Tombazis, single-seater director for the FIA, he confirmed that Sauber's situation led to a regulatory rethink for 2026.
"It is our responsibility to be fair," Tombazis said at Austin's US Grand Prix. "It became obvious to us that salaries in certain countries are much, much higher and cost of life is much higher in certain countries.
"I see it myself, I live in Geneva. Whenever I go to the supermarket I think about it. And we felt that a team based in a high labour cost country like Switzerland would end up having approximately 30% or even 40% fewer people working on the car, which we felt was fundamentally unfair.
"We've decided that this could either lead to us trying to take some protections from a regulatory point, or it would eventually mean that teams could not operate, and a team like Sauber would have to basically close and move to another country, which we don't think is the right way for the world championship to operate.
"So, that's why there's an adjustment in the financial regulations for 2026 which will basically adjust the salaries that get considered in the cost cap by some factors that get determined by OECD data, data that's available to the world. As we get data from teams, we know that this OECD data is very consistent with the salary differences that exist within Formula 1 context and amongst the engineers of teams. So it's not just OECD data."
For 2026, the F1 cost cap has been raised from $135m to $215m after including a whole raft of new items under the financial regulations.
Rather than a large net increase in the amount F1 teams will be spending, the new figure will now include several items that were previously exempted. The higher figure also takes into account inflation adjustments, as well as changes to the $USD exchange rate.
The additional $300,000 allowance for each sprint race is an item now included in the base figure, while the $1.8m allowance for any race over the ceiling of 21 has been raised to 24 Grand Prix per season.
Finally, teams can also no longer write off certain R&D costs made under the UK research and development expenditure credit scheme.
