Each year, the NBA sets a salary cap. Many people think of it as a hard ceiling that no team can exceed, but that is not how it works. NBA teams regularly go over the cap, and they do so within the rules.
On 30 June 2026, the NBA and the players’ union (NBPA) agreed on the financial figures for the 2026-27 season. Note* All amounts are in US dollars.
Where do the numbers come from?
NBA players are guaranteed 51% of the money the league makes in any given year, this money is called Basketball Related Income (BRI). As players receive a percentage rather than a fixed amount, nobody knows the exact figures until the season’s books are audited. Once the figures are audited and the totals are agreed, only then can the salary cap be formalised.
What is the 2026-27 salary cap?
It is not as simple as one number, there are actually six, and each measure has a different role.
| Measure | 2026-27 amount |
| Salary cap | $164,961,000 |
| Minimum team salary (the floor) | $148,465,000 |
| Tax level | $200,428,000 |
| Incremental tax bracket amounts | $6,064,000 |
| First apron | $209,015,000 |
| Second apron | $221,686,000 |
The salary cap is “soft”, meaning that a team can spend past it, but only by using one of the exceptions listed further down. Every team must spend at least $148,465,000 on players; this is referred to as “the floor”. If a team spends below this figure, it must pay the difference to the league.
The tax level is not a ceiling, but rather a luxury tax that a team must pay for going over the salary cap.
The two aprons are the strict lines. Where a team crosses either of the aprons, the offending team loses the right to do certain things, as explained in further detail below.
Salary cap exceptions
Once a team exceeds the salary cap, it cannot simply sign anyone it wants, the team needs permission from the league. The agreement between the league and the union sets out a list of these permissions, and each one comes with an attached dollar limit. These are called exceptions.
The best way to understand how an exception works is to think of it as a permission slip, without one, a team over the cap can only re-sign its own players or offer minimum contracts. But where a team has access to the permission slip, or an exception, they can shop for other players. Most free-agency deals are made where a team has an exception. The exception amounts for the 2026-27 are listed below:
| Exception | 2026-27 amount |
| Non-taxpayer mid-level exception | $15,044,000 |
| Taxpayer mid-level exception | $6,064,000 |
| Room mid-level exception | $9,366,000 |
| Bi-annual exception | $5,477,000 |
| Early Bird exception | $15,235,500 |
| Estimated average player salary | $15,163,000 |
What is an Apron? And why is it more important than the Salary Cap?
Above the tax level sits two more spending lines, called the aprons. Crossing the tax line costs a team money, whereas crossing an apron costs the team the exceptions it might otherwise have and might need to sign players.
- When under the tax level: the team can use the full non-taxpayer mid-level exception, worth $15,044,000;
- When over the first apron: the team drops to the taxpayer mid-level exception, worth $6,064,000. It also loses sign-and-trade deals and the bi-annual exception; and
- When over the second apron: no mid-level exception is granted at all, and the team cannot combine salaries in a trade, cannot send cash in a trade, and its future first-round picks are affected.
What is the maximum salary in 2026-27?
A player’s earning capacity is directly linked to how long they have been playing in the league. The figures listed below are a players maximum starting salary and not the total value of their contract:
| Years of service | 2026-27 maximum |
| 0-6 | $41,240,250 |
| 7-9 | $49,488,300 |
| 10+ | $56,911,545 |
Note* A player re-signing with his current team can receive five years with 8% raises each year, whereas a player moving to a new team is limited to four years with 5% raises. Players who hit performance targets, such as making an All-NBA team, can also reach a higher bracket.
What is the rookie scale?
Players drafted in the first round do not negotiate their salary. It is set in advance against the draft number, being the higher the pick, the higher the pay. The rookie scale as circulated by the NBPA, is reproduced below:
| Pick | Year 1 | Year 2 | Year 3 | Year 4 |
| 1 | $14,748,000 | $15,485,760 | $16,223,040 | $20,457,253 |
| 2 | $13,195,320 | $13,855,320 | $14,515,320 | $18,318,334 |
| 3 | $11,849,760 | $12,441,840 | $13,034,880 | $16,476,088 |
| 4 | $10,683,720 | $11,217,960 | $11,752,320 | $14,866,685 |
| 5 | $9,674,760 | $10,158,240 | $10,641,960 | $13,483,363 |
| 6 | $8,787,000 | $9,226,440 | $9,666,000 | $12,256,488 |
| 7 | $8,021,640 | $8,422,920 | $8,823,600 | $11,205,972 |
| 8 | $7,348,680 | $7,716,120 | $8,083,680 | $10,282,441 |
| 9 | $6,754,800 | $7,093,080 | $7,430,640 | $9,466,635 |
| 10 | $6,417,360 | $6,738,000 | $7,058,520 | $8,999,613 |
| 11 | $6,096,240 | $6,401,280 | $6,706,200 | $8,899,127 |
| 12 | $5,791,680 | $6,081,480 | $6,371,160 | $8,779,458 |
| 13 | $5,502,000 | $5,777,280 | $6,052,200 | $8,648,594 |
| 14 | $5,227,200 | $5,488,560 | $5,750,160 | $8,515,987 |
| 15 | $4,965,480 | $5,213,760 | $5,461,920 | $8,373,123 |
| 16 | $4,717,320 | $4,953,240 | $5,189,400 | $7,960,540 |
| 17 | $4,481,280 | $4,705,440 | $4,929,360 | $7,571,497 |
| 18 | $4,257,480 | $4,470,000 | $4,683,120 | $7,202,639 |
| 19 | $4,065,720 | $4,268,880 | $4,472,640 | $6,887,866 |
| 20 | $3,902,760 | $4,097,880 | $4,292,880 | $6,619,621 |
| 21 | $3,746,760 | $3,934,320 | $4,121,760 | $6,565,964 |
| 22 | $3,597,120 | $3,776,760 | $3,956,760 | $6,508,870 |
| 23 | $3,453,360 | $3,626,160 | $3,798,360 | $6,445,817 |
| 24 | $3,315,360 | $3,481,080 | $3,646,800 | $6,378,253 |
| 25 | $3,182,280 | $3,341,280 | $3,500,880 | $6,305,085 |
| 26 | $3,076,920 | $3,230,520 | $3,384,480 | $6,102,217 |
| 27 | $2,988,120 | $3,137,640 | $3,287,400 | $5,930,470 |
| 28 | $2,969,520 | $3,118,560 | $3,266,880 | $5,896,718 |
| 29 | $2,948,280 | $3,095,640 | $3,243,120 | $5,853,832 |
| 30 | $2,926,800 | $3,073,080 | $3,219,840 | $5,811,811 |
Source: 2026-27 Rookie Scale, NBPA. Note* Only the first two years of the contract are guaranteed. Years three and four are team options, which means the club decides whether to keep the player, not the other way round.
What is the minimum salary for a player?
Experience sets the price of the cheapest contract a player can be offered. For a player in his first season, that is $1,357,763 and for someone that is 10 years in, it is $3,876,529.[1] The league pays for time served; and the full scale is below:
| Years of service | 2026-27 | 2027-28 | 2028-29 | 2029-30 | 2030-31 |
| 0 | $1,357,763 | ||||
| 1 | $2,185,116 | $2,294,370 | |||
| 2 | $2,449,421 | $2,571,895 | $2,694,363 | ||
| 3 | $2,537,526 | $2,664,401 | $2,791,275 | $2,918,152 | |
| 4 | $2,625,627 | $2,756,912 | $2,888,193 | $3,019,474 | $3,150,758 |
| 5 | $2,845,883 | $2,988,178 | $3,130,471 | $3,272,766 | $3,415,061 |
| 6 | $3,066,143 | $3,219,451 | $3,372,754 | $3,526,061 | $3,679,369 |
| 7 | $3,286,399 | $3,450,720 | $3,615,040 | $3,779,359 | $3,943,681 |
| 8 | $3,506,659 | $3,681,991 | $3,857,326 | $4,032,662 | $4,207,996 |
| 9 | $3,524,115 | $3,700,320 | $3,876,527 | $4,052,733 | $4,228,939 |
| 10+ | $3,876,529 | $4,070,355 | $4,264,183 | $4,458,009 | $4,651,836 |
Source: 2026-27 Minimum Salary Scale, NBPA. Note that the figures for 2027-28 and later years are projections tied to the NBA’s cap estimates and are not yet finalised.
What is escrow, and why did players lose 5.5% this year?
As players are entitled to a share of the league’s income and not a fixed sum, the league holds back an amount of every player’s salary during the season, until an audit at season’s end is complete. The money that is held back is called the escrow amount.
Once the audit is settled, and it is determined that the players were paid more than their 51% income share, the difference is taken from the escrow amount. This happened in the 2025-26 season, where players’ salaries reached USD 317 million above their share, resulting in every player final 2025-26 salary being reduced by 5.5%. For context, if someone had a contract for USD 10 million, they had a pay reduction of USD 550,000.00.
For the 2026-27 season, the league will hold back 10% of salaries, spread evenly across the year.
What will the salary cap be in 2027-28?
The league has told teams to expect a rise of about 5.5%.
| Measure | Projected 2027-28 |
| Salary cap | About $174 million |
| Tax level | About $211 million |
| First apron | About $220 million |
| Second apron | About $234 million |
*Note: These figures provided by the NBPA are only early estimates and are subject to change.
How KPA Lawyers can help?
Ray Purcell is the Managing Partner of KPA Lawyers, an experienced litigator and commercial lawyer, and an Accredited AFL and NBA Player Agent. He advises athletes, agents and clubs on contract negotiation, salary cap and compliance questions, and disputes arising from playing contracts.
KPA Lawyers can provide you with advice on:
- Settle disagreements by negotiation before they turn into disputes.
- where a player sits on the maximum, rookie and minimum scales before talks begin;
- Understanding what an apron will do to a proposed deal, before terms are agreed;
- Working out which exceptions a rival club actually has available, and price accordingly;
- Ensuring pay and commission are calculated on the right figures once escrow is applied;
- Tell the difference between a deal agreed in the moratorium and a binding contract; and
- Settle disagreements by negotiation before they turn into disputes.
REFERENCES
- Primary:
- National Basketball Association, “NBA sets Salary Cap for 2026-27 season at $164.961 million”, official press release, 30 June 2026.
- Collective Bargaining Agreement between the NBA and the National Basketball Players Association (2023), published in full by the NBPA.
- NBPA, 2026-27 Rookie Scale and 2026-27 Minimum Salary Scale.
- Secondary:
- Hoops Rumors, Salary Cap, Tax Line Set For 2026/27 NBA Season, 30 June 2026.
- Hoops Rumors, NBA Maximum Salaries For 2026/27, June 2026.
- Hoops Rumors, Rookie Scale Salaries For 2026 NBA First-Round Picks, July 2026.
- Spotrac, NBA Rookie Scale.
- Over the Apron, NBA Minimum Salaries 2026-27 – Scale by Years of Service.
- The CBA Guide, Luxury Tax Thresholds.
- Bleacher Report, 2026-27 NBA Salary Cap, 1st and 2nd Aprons, Luxury Tax Levels Revealed Before FA.
- Eric Pincus, Happy NBA New Year 2026-27 (plus Cap Figures), 30 June 2026
- Sportico, reporting on 2025-26 basketball-related income and the escrow reconciliation, July 2026.
- RealGM, reporting on the NBA’s team memo recording $11.676 billion in basketball-related income for 2025-26, July 2026.
- Mike Vorkunov, The Athletic, reporting on the NBA’s projection memo to teams for the 2027-28 season, June 2026 (subscription required).
