Riot Games has updated the financial rules governing South Korea’s top League of Legends league, the LCK, adding a more detailed tax system for teams that spend heavily on player salaries. The changes take effect in September 2026 and are commonly referred to as a “luxury tax” system.
The rules are built around the idea of a soft salary cap. Unlike a hard cap, teams are not blocked from spending above the limit. Instead, they are taxed more the further over the line they go. There is still no limit on what an individual player can be paid. The restrictions apply only to a team’s total spending on its top talent.
The cap itself is based on the combined salaries of a team’s five highest-paid players, not the full roster, as LoL teams can roster more than five players (starters + substitutes, reserves, or academy call-ups). That figure is set at 4 billion Korean won ($2.86 million) and is recalculated every two years using the combined revenue of all ten LCK teams. Teams also have a spending floor, meaning they are required to spend at least roughly 70% of the money they receive from LCK revenue distribution on player salaries. The floor is meant to stop teams from pocketing league revenue instead of investing it in their rosters.
If a team’s top five salaries add up to more than 4 billion won ($2.86 million USD), it now pays tax on the amount above that threshold, split into four brackets rather than a single flat rate:
- ₩4–6 billion ($2.86–$4.29 million): 25% tax on the excess.
- ₩6–8 billion ($4.29–$5.71 million): 35% tax on the amount within this bracket.
- ₩8–10 billion ($5.71–$7.14 million): 50% tax on the amount within this bracket.
- ₩10 billion+ ($7.14 million+): 65% tax on the amount within this bracket.
In each case, the tax only applies to the portion of spending that falls within that bracket, not the team’s entire salary total.
Riot has also confirmed that money collected through this tax is not kept by the league: It is redistributed to teams that spent above the minimum floor but stayed under the 4 billion won cap, split evenly among them. Teams that failed to meet the spending floor do not receive any share of that payout, giving teams an added incentive to spend at least the minimum required amount.
For example, if the tax collects ₩1 billion (approximately US$714,000) and there are five teams that meet the minimum spending requirement without exceeding the ₩4 billion (approximately US$2.86 million) cap, each team would receive ₩200 million (approximately US$143,000). However, if a team spent less than the required minimum of 70 percent of the money it receives from LCK revenue distribution on player salaries, it would receive nothing from this ₩1 billion.
In another instance, if T1 pays more than ₩4 billion in combined salaries to its five highest-paid players while Gen.G stays under the ₩4 billion limit, T1 will have to pay a tax based on the tax brackets outlined above, and Gen.G will receive a portion of the money T1 has paid. Riot Games is essentially incentivising teams that stay under the limit while penalising those that exceed it.
Some forms of compensation are left out of the cap calculation entirely. Prize money teams earn from Worlds (League of Legends World Championship), MSI (Mid-Season Invitational), and LCK events does not count, and neither do personal bonuses for winning Finals MVP at Worlds, MSI, or LCK, Regular Season MVP, a spot on the All-LCK First Team, or Rookie of the Year. A bonus for making the All-LCK Second Team is only partially exempt, with half of its value still counting toward the cap.
Together, the changes give LCK organisations a more detailed set of financial guardrails than before, with steeper penalties for the highest spenders and narrower rules on how teams can use performance and loyalty to lower their effective salary numbers.
