Formula One is well-known as the pinnacle of motorsport, so it’s no surprise that the drivers are some of the highest-paid athletes in auto racing. However, they might not be getting paid as much as you think, especially compared to other sports organizations like the MLB or NFL, which are notorious for having high-paid athletes. Formula 1 drivers generally make between $1 million and $45 million a year, excluding sponsorships and race bonuses.
So, what goes into F1 driver salaries? Is there a salary cap in Formula 1 racing? Who has earned the most money from F1 racing? Who earns the least amount per racing season?
Here is the complete breakdown as to how much F1 drivers make!
What Goes into F1 Driver Salaries?
Like many motorsports’ athletes, the compensation an F1 driver earns consists of a few things. The different components of a F1 driver’s salary includes their base salary, prize winnings, and sponsorships. Generally, it’s hard to accurately report on how much each driver makes because teams keep their financial reports well-protected. However, news sources and blogs enjoy speculating with available information on how much driver’s make.
While teams and drivers keep financial information secret, there is some public knowledge about how the FIA allocates prize money to each team. Experts can estimate just how much drivers and constructors can earn for a race win. Some drivers may double their base salary in prize money alone with exorbitant prize purses. In fact, that’s just how the highest-earning drivers make most of their money each year.
Is there a Salary Cap in Formula 1?
In 2021, the FIA instituted a cost cap to try to increase parity in Formula 1. This cap restricts how much teams can spend on vehicles, car parts, development, and staff for the year. The budget cap’s design is to get more restrictive year over year, starting at $145 million in 2021, decreasing to $140 million in 2022, and ultimately ending at $135 million in 2023.
Currently, driver’s costs and fees are not part of the cost cap. That means that F1 teams can pay their drivers as much as needed.
However, insiders and fans speculate that there may be a salary cap on the horizon for the sport. An estimated value that has been proposed for the salary cap would be $30 million, which is a number reached by most of the grid, including Ferrari and McLaren. The two outliers for this proposed salary cap are Red Bull Racing and Mercedes, who notably have secured two of the best drivers on the grid.
Who is the Highest Paid Formula 1 Driver?
With seven world championship titles, it’s no surprise that Lewis Hamilton is the highest-paid driver in Formula 1. In 2021, Hamilton made an estimated $200 million in 2021 once sponsorship dollars and winnings were added to his $40 million base salaries. Sources estimate that Lewis brings in about $12 million a year in sponsorships, showing just how marketable he is outside of the sport.
World champion Max Verstappen is a distant second for top earners in F1. His $25 million base salary with Red Bull Racing is nearly half of his closest rival. He’s also considerably less marketable, with only an estimated $1 million in endorsements. However, with over ten wins in the 2021 season, he likely made up some ground as far as estimated winnings are concerned.
Alpine driver Fernando Alonso and McLaren driver Lando Norris are tied for the third highest-paid drivers with an estimated $20 million each base salary from their teams. One notable difference between the two drivers is Norris’s long contract. While most F1 drivers sign only a one-year contract, Lando Norris signed with McLaren through 2025, showing how much the team believes in his development and future performance.
Who is the Lowest Paid Formula 1 Driver?
Formula 1 teams will often pay top dollar for established racers. That means rookie drivers on struggling teams often make much less than those they share the grid with. The lowest-paid drivers rarely finish in the points and cannot usually bring in significant sponsors, meaning their total earnings are relatively anemic.
Yuki Tsunoda from Alpha Tauri, the sister team of Red Bull Racing, is the lowest earner on the grid, only bringing in an estimated $750,000. The inexperienced driver finished his rookie year with only seven points finishes, enough to place 14th in the driver world championship standings.
Rookie driver for Alfa Romeo, Zhou Guanyu, Williams driver Nicholas Latifi, and Haas driver Mick Schumacher all round out the bottom earners, making a reported $1 million each in base salary. However, these drivers could bring in considerable sponsorships despite their low base salaries. These many sponsorships are particularly true for Schumacher, the son of F1 great Michael Schumacher. With sponsors like UnderArmour and 1&1, he brings plenty of support to the Haas F1 Team, which helps ensure they have a space in each F1 race.
Which Formula 1 Driver Has the Most Historical Earnings in their Career?
With seven world championship finishes, it’s no surprise that Michael Schumacher is the highest earner in Formula 1 of all time. Many motorsport experts estimate that Michael’s total winnings easily eclipse the $1 billion mark. With historic race dominance against some other racing greats, like Sebastian Vettel, Lewis Hamilton, and Kimi Raikkonen, it’s no surprise that Michael Schumacher is worthy of his substantial prize purses and notoriety in the sport.
Conclusion: How Much Do Formula 1 Drivers Make?
Considering how much money is present in every Formula 1 Grand Prix, it can be shocking to see some of the modest base salaries drivers get for their expertise on the racetrack. However, many drivers make most of their money in race winnings, which can easily double how much they make in a year. In addition to that, getting sponsorships both during and not during the racing season can significantly increase a driver’s salary, especially if they win significant races during the season.
Formula 1 and the FIA are very secretive about their finances. Experts don’t know exactly what drivers make unless they release it publicly. However, some information is often shared with journalists that allow fans and pundits to debate what goes into financing a winning F1 team.