La Liga has slashed spending limits for its clubs by €610 million ($724.25m) for the 2020/2021 season due to the financial impact of the Covid-19 pandemic, the league said on Tuesday.
Barcelona's salary cap has been cut to €382.7m from last season's €671m – by nearly €288m – while defending champions Real Madrid can spend €468m, down €172.5m from last season's spending limit.
Barcelona, who posted an after-tax loss of €97m for the 2019/20 financial year, initiated a fresh round of pay cuts last month despite opposition from several players.
The club had earlier imposed a temporary pay cut of 70 per cent lasting from March to June, and got rid of several high earners, including striker Luis Suarez and playmaker Ivan Rakitic, in the close season.
Atletico Madrid, who finished third last season, will be allowed to spend €252.72m in 2020/21, down nearly €96m from last season.
"This squad spending limit denotes the maximum amount that each club can spend... including spending on the first team in relation to players, the manager, assistant manager and fitness coach," La Liga said in a statement.
The total wage limit for all 20 La Liga clubs is now €2.33bn.