What is the NBA Salary Cap?

The NBA salary cap is the maximum amount each team can spend on player salaries in a given season. It’s recalculated every year as a fixed percentage of the league’s basketball-related income (BRI). Unlike the NFL, the NBA uses a soft cap, meaning teams can exceed it through specific exceptions — but doing so triggers escalating penalties.

Definition

The salary cap is set every June by the NBA based on projected revenues for the upcoming season. The current cap and tax structure for 2025-26 is built around three main thresholds: the salary cap itself, the luxury tax line, and two apron thresholds (first and second apron) introduced in the 2023 CBA.

Each team must spend at least 90% of the cap (the salary floor) and is heavily restricted in roster-building once it crosses an apron. The two-apron system, in particular, was designed to limit how aggressively the wealthiest teams can stack stars.

Why it matters

The salary cap shapes every roster decision in the NBA. It determines who can be traded for whom, which free agents a team can realistically sign, whether a contender can afford to bring back its veterans, and whether ownership is willing to pay the luxury tax. When you read that a deal is held up by salary matching, or that a team has been « hard-capped, » you’re seeing the cap rules in action.

Understanding the cap is also the only way to make sense of the trade deadline. Roughly 90% of in-season trades are constructed around getting the salary math to work — incoming and outgoing salaries must usually match within a tight tolerance, depending on the team’s cap status.

Key terms

• Soft cap: The basic cap line. Teams can exceed it through exceptions.
• Hard cap: A ceiling teams cannot cross under any circumstances. Triggered by certain transactions (using the BAE, signing-and-trading, full MLE while above the first apron).
• Luxury tax: A penalty paid by teams whose payroll exceeds the tax line. Tax rates are progressive and increase sharply for repeat offenders.
• First apron: Threshold above which the team loses access to the BAE, the full MLE, and several trade flexibilities.
• Second apron: Stricter threshold above which the team loses the taxpayer MLE, can’t aggregate salaries in trades, can’t include cash, and has its first-round pick frozen seven years out.
• Mid-Level Exception (MLE): The largest exception teams above the cap can use in free agency. Several variants exist: full MLE, taxpayer MLE, and room MLE.
• Bi-Annual Exception (BAE): A smaller free-agent exception teams can use every other year, and only if they’re below the first apron.
• Bird rights: Mechanism that lets a team re-sign its own free agent above the cap. Comes in three flavors: full Bird, Early Bird, Non-Bird.
• Max contract: A cap on individual salary based on years of NBA service. Veterans with 10+ years can earn up to 35% of the cap; players with 7-9 years up to 30%; younger players up to 25%.
• Supermax: A 35% max available only to All-NBA / MVP / DPOY winners re-signing with the team that drafted them, before they hit unrestricted free agency.

Recent changes

The 2023 CBA, ratified in April 2023 and effective from July 2023, introduced the two-apron system — the most significant cap reform in a decade. The second apron in particular has dramatically reshaped how big-market teams operate, with the Warriors, Suns, Bucks and Clippers among the franchises whose roster construction has been visibly constrained since.

Cap projections continue to rise sharply due to the new media-rights deal that took effect for the 2025-26 season. The cap is now expected to climb roughly 10% per year through the end of the current CBA in 2030, which fundamentally changes how franchises think about long-term contracts.

Frequently asked questions

Is the NBA salary cap the same every year?

No. The cap is recalculated every year as a percentage of basketball-related income. It can rise — or, in rare cases, drop — depending on league revenue.

Can a team exceed the salary cap?

Yes. The NBA uses a soft cap. Teams can go over through Bird rights, the MLE, the BAE, sign-and-trades, and several other exceptions. They just pay the luxury tax once they cross the tax line.

What’s the difference between the first and second apron?

The first apron restricts which exceptions a team can use and which trades it can build. The second apron is stricter still — no salary aggregation, no taxpayer MLE, no cash in trades, and a frozen first-round pick. Crossing the second apron is now treated as a hard cap by most front offices.

Can a team be hard-capped during the season?

Yes. Triggering certain transactions — using the BAE, signing a player off another team’s offer sheet, or acquiring a player via sign-and-trade — instantly hard-caps a team for the remainder of the season at the first apron.

Related articles

• What is the NBA Collective Bargaining Agreement (CBA)?
• How NBA Trades Work: Rules and Mechanics
• Top NBA Salaries — 2025-26