When it comes to player salaries, Major League Baseball functions on a Competitive Balance Tax, commonly referred to a luxury-tax system.
In other words, MLB does not have a hard salary cap set for each team.
For 2023, the luxury tax kicks in for teams that spend in excess of $233 mil USD on salaries.
Note that players can negotiate and sign contracts for any amount that a team is willing to pay them.
But due to the luxury tax threshold, teams might be limited in their ability to spend on players.
Furthermore, the tax rate increases for each consecutive year a team exceeds the threshold. This can make it expensive for teams that repeatedly spend too much.
In fact, it may even impact a team’s future draft picks.
Nonetheless, the highest paid MLB player is earning just over $43mil USD for the season.
There are two players who share the honor. Continue reading to find out who they are.
In addition, there is a minimum salary in place set at $720,000 USD in 2023.
This league minimum is scheduled to increase each subsequent season as agreed to in the MLB Collective Bargaining Agreement.
See the details in the table below.
|MLB Season||Minimum Salary (USD)|
Knowing the upper and lower end of player salaries, we can conclude the average lies somewhere in between.
What is the average MLB salary?
The average MLB player salary is $4,722,111 USD as of the start of the 2023 season. This value is based on 1000 player signings for all thirty teams combined. The highest paid players are Max Scherzer and Justin Verlander at $43,333,333 USD, while 75 players are paid the league minimum of $720,000 USD.
Scherzer and Verlander both happen to be starting pitchers. Yet their contract lengths are only three- and two-years with the New York Mets, respectively.
The next player on the list is Aaron Judge earning a cool $40 million USD playing for the New York Yankees.
Judge signed a 9-year deal for a total of $360 million USD in December of 2022.
In the 2022 season, he hit 62 homers and scoring 131 RBIs. Judge also managed one of the best batting averages at .311 as well.
Here are other salary numbers that might interest you.
580 players (58%) earn $1,000,000 USD or more, while 284 players (or 28.4%) make above the league average.
Keep in mind that these values are based on current season salaries, and not annual cap hits from player contracts.
Moreover, the salaries are calculated by adding each player’s base salaries along with their respective signing bonuses.
As for the largest contract in MLB history, that honor goes to Mike Trout of the Los Angeles Angels.
Trout negotiated a 12-year extension deal for $426.5 million USD back in 2019. He’s earning an average of $35,541,667 USD annually until 2030.
MLB Salary Structure
It’s common for players to sign multi-year MLB contracts with very little restrictions.
The amount is “limited” by the soft-cap luxury tax on the team, while the contract length is boundless.
And just like the NBA salaries, MLB contracts are fully guaranteed regardless of if the player is injured, sent down to the minors or released by the team.
The contracts are composed of three elements including the base salary, signing bonus and player incentives.
While the MLB prohibits incentives from being awarded based on statistical achievements, playing time is not off limits.
As a result, most incentives are based on attained objectives for plate appearances related to hitters and innings pitched, number of games started, number of relief appearances, number of games finished for pitchers.
Average Salary for Starting Pitchers
Based on the 2023 season, the average salary for an MLB Starting Pitcher is $6,950,793 USD. There are 211 starting pitchers under contract for the season.
As highlighted earlier, Max Scherzer (New York Mets) and Justin Verlander (New York Mets) are the highest paid at $43,333,333 USD for the current season.
Not too far behind is Gerrit Cole of the New York Yankees, listed at #6 overall with a $36,000,000 USD salary.
There are 131 starting pitchers (62.1%) making $1.0 Million USD or more, while 9 starting pitchers (4.3%) are making the league minimum of $720,000 USD.
Lastly, there are 92 (43.6%) starters that are making more than the average salary.
Average Salary for Relief Pitchers (and Closers)
Relief pitchers and closers earn one third less than their starter counterparts with an average annual salary of $2,318,772 USD.
As of early 2023, there are 304 relief pitchers (and closers) under contract.
The highest earner in this category is reliever Edwin Diaz of the New York Mets with an annual salary of $19,650,000 USD.
That’s more than 50% less of his pitching teammates Scherzer and Verlander.
The next highest paid relievers are Kenley Jansen (Boston Red Sox) and Raisel Iglesias (Atlanta Braves) at $16,000,000 USD.
There are 153 relief pitchers (50.3%) making $1.0 Million USD or more, while 24 relief pitchers (4.3%) are making the league minimum of $720,000 USD.
Lastly, there are 39 (12.8%) relievers/closers that are making more than the average salary.
Average Salary for Infielders (including Catchers)
Normally, your infielders are made up of the shortstop, first, second and third basemen.
Pitchers and catchers are referred to as the battery.
For this group, I included the catchers as part of the infield. Your average infielder earns $5,050,757 for the 2023 MLB season.
There are 303 infielders and catchers under contract.
Anthony Rendon, third baseman for the Los Angeles Angels is the top earner of any infield player with a salary of $38,571,428 USD.
Rendon has the #4 highest salary of all MLB players in 2023.
He was rewarded with a seven-year, $245 million contract by the Angels, following his World Series win in 2019 with the Washington Nationals.
The last few seasons Rendon has seen limited playing time due to COVID and injuries.
He’s yet to live up to his contract when you look at his batting numbers since 2019.
Next in line is Texas Rangers shortstop, Corey Seager, with a salary of $35.5mil USD.
His contract was earned mainly for his fielding abilities and high OPS+ (On Base Plus Slugging Percentage).
There are 187 infielders (61.7%) making $1.0 Million USD or more, while 90 infielders (4.3%) are making the league minimum of $720,000 USD.
Lastly, there are 90 (29.7%) infielders that are making more than the average salary.
Further down my post, I describe the top earner and average for each infield position individually, including a separate row for catchers.
Average Salary for Outfielders
There are a total of 160 outfielders signed to the 2023 MLB season, with an average salary of $5,304,946 USD.
As highlighted earlier, your top earner in outfield is Aaron Judge of the New York Yankees at $40,000,000 USD.
Right behind him is Mike Trout who signed the largest ever MLB contract for $426.5mil USD over 12 years (or $37,116,666 USD annually).
These two players rank #3 and #5 respectively in overall player salaries.
There are 93 infielders (58.1%) making $1.0 Million USD or more, while 12 outfielders (7.5%) are making the league minimum of $720,000 USD.
Lastly, there are 53 (33.1%) outfielders that are making more than the average salary.
Average Salary for Designated Hitters
The designated hitter (DH) list is quite short as it only applies to players on American League teams.
There are a total of 22 designated hitters signed to the 2023 MLB season, with an average salary of $7,791,620 USD.
Your top DH earners are Giancarlo Stanton (New York Yankees) and Miguel Cabrera (Detroit Tigers) at $32,000,000.
Typically, your DH players are your power hitters, who are basically a home run threat for every at bat.
For some players, they are converted to designated hitters at the tail end of their career, when their fielding skills deteriorate.
There are 17 designated hitters (77.3%) making $1.0 Million USD or more, while 1 DH (4.3%) is making the league minimum of $720,000 USD.
Lastly, there are 10 (45.5%) designated hitters that are making more than the average salary.
MLB Team Salary and Roster Obligations
How do general managers decide the amount to spend on each player?
Well, there are rules in place that teams must adhere to.
First off, each team can have up to 26 players on their Active Roster, including a maximum of 13 pitchers.
The only exception is if the team is scheduled for a doubleheader, allowing the team to recall one additional player (27th man) from the 40-man roster limit.
The 40-man roster limit is made up of the 26-man roster, the 7-, 10-, and 15-day injured lists, medical emergency list, and the paternity leave list, as well as some Minor Leaguers.
In essence, if a player gets injured or sent back down to the minors, they can be replaced to fulfill their active roster limit.
As a result, you will see most teams pay more than just those 26 players throughout the season.
At the start of the season, the average team has about 33 players signed (i.e. 1000 players, 30 teams).
This number will likely increase even higher as the season progresses. We've seen this play out this way in the past.
The salary structure and range for each MLB position can be summarized as follows:
MLB Salary Breakdown by Position
|POSITION||LOW (USD)||AVERAGE (USD)||HIGH (USD)||TOP EARNER|
|ALL||$720,000||$4,722,111||$43,333,333||Max Scherzer &
|STARTING PITCHER||$720,000||$6,950,793||$43,333,333||Max Scherzer &
|RELIEF PITCHER/CLOSERS||$720,000||$2,318,772||$19,650,000||Edwin Diaz|
|FIRST BASEMAN||$720,000||$8,142,186||$27,000,000||Freddie Freeman|
|SECOND BASEMAN||$720,000||$4,282,263||$29,000,000||Jose Altuve|
|THIRD BASEMAN||$720,000||$7,014,096||$38,571,428||Anthony Rendon|
|SHORT STOP||$720,000||$4,753,895||$35,500,000||Corey Seager|
|DESIGNATED HITTER (DH)||$720,000||$7,791,620||$32,000,000||Giancarlo Stanton|
As the league continues to grow in profits, it's certain that we'll see the average salary increase as well.
We already know that the base salary is increasing over the next few seasons.
I expect to see that minimum to be raised even further once the new Collective Bargaining Agreement is signed beyond the 2026 season.
The other number to keep an eye on is the luxury tax ceilings.
As the tax is further increased, the premium teams will openly dish out more money to attract top free agent talent.
The next benchmarks to be reached are $50mil USD annually and half a billion dollars in guaranteed contracts.
Keep your eye on the ball as these new thresholds will be met, and most likely shattered, well before 2030.