How the NBA salary cap works
A plain English guide to the cap, the aprons, and the luxury tax, with the real 2026-27 numbers.
The NBA runs a softsalary cap. Rather than a hard spending limit, it's a baseline that teams routinely exceed through a web of exceptions. But the further past it they go, the more it costs and the fewer roster tools they keep. Five dollar lines define the whole system. Here's what each one means for the 2026-27 season.
The five lines
Cap floor
$147,000,000The minimum a team must spend (90% of the cap). Fall short and the shortfall is split among the players on the roster, so effectively every team spends at least this much.
Salary cap
$165,000,000The baseline team budget. It's a soft cap: most teams spend past it using exceptions like Bird rights (keeping your own players) and the midlevel exception.
Luxury tax line
$201,000,000Cross this and you pay the luxury tax on every dollar above it, at rates that climb the deeper you go. Repeat offenders pay even more.
First apron
$209,000,000A harder ceiling. Above it a team loses the full midlevel exception, can't acquire players via sign and trade, and can't sign players bought out of larger contracts.
Second apron
$222,000,000The hardest ceiling. No combining salaries in trades, no cash in deals, and no midlevel exception at all. A future first round pick gets frozen and can slide to the end of the round.
Every team on the league table carries a badge for the band it lands in: Under cap, Over cap, Luxury taxpayer, Over 1st apron, Over 2nd apron.
Where the highest spender sits this season: the Oklahoma City Thunder at $240.9M:
$165M
$201M
$209M
$222M
The luxury tax
Once a team's payroll passes the tax line ($201,000,000), it pays a tax on the overage. The rate isn't flat, it's graduated: the overage is sliced into $5.8M bands, and each band is taxed harder than the last. Teams that have paid the tax in three of the previous four seasons are repeaters and pay steeper rates across the board.
| Band (over the tax line) | Standard rate | Repeater rate |
|---|---|---|
| $0.0M to $5.8M | $1.50 | $2.50 |
| $5.8M to $11.6M | $1.75 | $2.75 |
| $11.6M to $17.3M | $2.50 | $3.50 |
| $17.3M to $23.1M | $3.25 | $4.25 |
| $23.1M and beyond | +$0.50 per band | |
Rates are dollars of tax per dollar over the line. Beyond the listed bands, each further $5.8M band adds another $0.50 to the rate.
A worked example: the Oklahoma City Thunder this season:
$39,947,066 over the $201,000,000 tax line · standard rates
| Bracket | Amount in band | Rate | Tax |
|---|---|---|---|
| $0 to $5,780,000 | $5,780,000 | $1.50 | $8,670,000 |
| $5,780,000 to $11,560,000 | $5,780,000 | $1.75 | $10,115,000 |
| $11,560,000 to $17,340,000 | $5,780,000 | $2.50 | $14,450,000 |
| $17,340,000 to $23,120,000 | $5,780,000 | $3.25 | $18,785,000 |
| $23,120,000 to $28,900,000 | $5,780,000 | $3.75 | $21,675,000 |
| $28,900,000 to $34,680,000 | $5,780,000 | $4.25 | $24,565,000 |
| $34,680,000 to $39,947,066 | $5,267,066 | $4.75 | $25,018,564 |
| Total luxury tax | $123,278,564 | ||
The aprons
The 2023 Collective Bargaining Agreement added two lines above the tax line, called the aprons, that trade money for flexibility. Paying the tax is expensive; crossing an apron is restrictive, and the penalties are meant to stop the richest teams from simply buying every advantage.
Above the first apron$209,000,000
- Only the smaller taxpayer midlevel exception, not the full one.
- Can't acquire a player through a sign and trade.
- Can't sign a player bought out of a bigger contract.
- Can't take back more salary than it sends out in a trade.
Above the second apron$222,000,000
- No midlevel exception at all.
- Can't combine multiple salaries to match a bigger one in a trade.
- Can't send cash in trades.
- A future first round pick is frozen and can be pushed to the end of the first round.
How this site measures it
A team's real tax payroll involves incomplete roster charges, exceptions, and cap holds that public sources don't fully expose. This site approximates tax payroll as the sum of players' guaranteed cap hits, which tracks closely for most teams but can differ around the edges. Because it's the offseason, rosters are still filling out and some may be short of a full 15. Every figure updates when the underlying data does.
Thresholds and tax rates from the 2026-27 CBA configuration. Roster and salary data from Basketball Reference, generated July 6, 2026.