Salary Arbitration and Arbitration Eligibility
What is salary arbitration?
Salary arbitration is a process each offseason used to determine salaries for a select group of players for the upcoming season.
Who is eligible?
A player is deemed to have reached "one year" of Major League service time upon accruing 172 days in a given year. Once players reach three years of service time, they become eligible for arbitration, assuming they haven’t yet signed a contract for the upcoming season.
Once a player becomes eligible for salary arbitration, he is eligible each offseason (assuming he is tendered a contract) until he reaches six years of Major League service. At that point, the player becomes eligible to test free agency at the end of the season.
What is the “Super Two” designation?
Players who have less than three but more than two years of service time can also become arbitration eligible if they meet certain criteria; these are known as "Super Two" players. Super Two players therefore can have up to four seasons of arbitration eligibility, compared with up to three seasons for most players.
To qualify for the Super Two designation, players must rank in the top 22 percent, in terms of service time, among those who have amassed between two and three years in the Majors and have accrued at least 86 days of service time during the preceding season. The specific cutoff date varies on a year-to-year basis.
How does arbitration work?
If the club and an arbitration-eligible player have not agreed on a salary by a deadline (typically in mid-January), the club and player must exchange salary figures for the upcoming season.
After the figures are exchanged, a hearing is scheduled (typically in February). Teams and players are still free to continue negotiating on a contract up until the hearing date. If no one-year or multi-year settlement can be reached by the hearing date, the case is brought before a panel of arbitrators. After hearing arguments from both sides, the panel selects either the player- or team-submitted salary figure (but not one in between) as the player's salary for the upcoming season.
The week prior to the exchange of arbitration figures is when the vast majority of arbitration cases are avoided, either by agreeing to a one- or multi-year contract.
What does it mean to tender a contract?
To tender a contract to a player is to agree to give a contract for the upcoming season to a player who is under club control (i.e., players who haven't reached the requisite six years of Major League service time to be eligible for free agency) and hasn't yet signed a contract for the upcoming season. Controllable players on the 40-man roster must be tendered contracts by a set deadline or they will be considered "non-tendered," thereby immediately making them free agents.
Contracts must be tendered to both arbitration-eligible and pre-arbitration players, though players in the latter group have no say in their forthcoming salary.
Notable arbitration figures:
Highest one-year salaries through arbitration (post-tender settlement or hearing):
- Juan Soto, $31 million (2024, fourth year)^
- Vladimir Guerrero Jr., $28.5 million (2025, fourth year)^
- Mookie Betts, $27 million (2020, third year)
- Nolan Arenado, $26 million (2019, fourth year)^
- Josh Donaldson, $23 million (2018, fourth year)^
^Super Two player
Note: Shohei Ohtani signed a one-year, $30 million contract for 2023, which would be the second-highest figure on this list, but the deal was completed prior to the tender deadline. So it doesn't count as an arbitration settlement.
Highest one-year salary for a player in their first year of arbitration:
- Cody Bellinger, $11.5 million (2020)
Highest one-year salary for a player in their second year of arbitration:
- Mookie Betts, $20 million (2019)
Highest one-year salary for a player in their third year of arbitration:
- Mookie Betts, $27 million (2020)
Note: Shohei Ohtani signed a one-year, $30 million contract for 2023, which would be the highest for a third-time eligible player, but the deal was completed prior to the tender deadline. So it doesn't count as an arbitration settlement.
Highest arbitration salary awarded in a case decided by a hearing:
- Vladimir Guerrero Jr., $19.9 million (2024)