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{{Use dmy dates|date=September 2023}}
{{Short description|National Basketball Association payment cap}}
The '''NBA salary cap''' is the limit to the total amount of money that [[National Basketball Association]] teams are allowed to pay their players. Like the other major professional sports leagues in [[North America]], the NBA has a [[salary cap]] to control costs and benefit parity, defined by the league's [[NBA Collective Bargaining Agreement|collective bargaining agreement]] (CBA). This limit is subject to a complex system of rules and exceptions and is calculated as a percentage of the league's revenue from the previous season. Under the CBA ratified in July 2017, the cap will continue to vary in future seasons based on league revenues. For the [[
The majority of American leagues (NFL, NHL, MLS) have hard caps while the NBA has a soft salary cap. Hard salary caps forbid teams from going above the salary cap. Soft salary caps allow teams to go above the salary cap, but will subject such teams to reduced privileges in [[Free agent|free agency]]. Teams that go above the [[luxury tax (sports)|luxury tax]] cap are subject to the luxury tax (a tax on every dollar spent over the luxury tax cap).
==History==
The NBA had a [[salary cap]] in the mid-1940s, but it was abolished after only one season. The league continued to operate without such a cap until the [[1984–85 NBA season|1984–85]] season, when one was instituted in an attempt to level the playing field among all of the NBA's teams and ensure competitive balance for the League in the future. Before the cap was reinstated, teams could spend whatever amount of money they wanted on players, but in the first season under the new cap, they were each limited to $
Under the 2005 [[NBA collective bargaining agreement|CBA]], salaries were capped at 57 percent of basketball-related income (BRI) and lasted for six years until June 30, 2011.<ref>{{cite news |last=Broussard |first=Chris |
To ensure the players get their share of the BRI, teams are required to spend 90 percent of the salary cap each year. The salary cap for the [[2022–23 NBA season|2022–23 season]] is $123.655 million (minimum team salary, which is set at 90 percent of the Salary Cap, is $111.290 million).<ref name="2022NBAcap">{{cite web|url=https://www.nba.com/news/nba-salary-cap-for-2022-23-season-set-at-just-over-123-million|title=NBA salary cap for 2022-23 season set at just over $123 million|date=30 June 2022|publisher=NBA|access-date=July 7, 2022}}</ref> The league's newest CBA, which takes effect with the 2023–24 season, requires teams to meet the 90% salary floor at the start of preseason training camp.<ref>{{cite web|url=https://sports.yahoo.com/2023-nba-draft-how-serious-are-teams-taking-the-new-cba-even-the-big-spending-warriors-are-shedding-salary-061459899.html |title=2023 NBA Draft: How serious are teams taking the new CBA? Even the big-spending Warriors are shedding salary |first=Jake |last=Fischer |website=Yahoo Sports |date=June 23, 2023 |access-date=June 28, 2023}}</ref>
In December 2016, the league and the players' union reached a tentative agreement on a new CBA, with both sides ratifying it by the end of that month.<ref>{{cite press release|url=http://www.nba.com/article/2016/12/23/nba-and-nbpa-ratify-new-collective-bargaining-agreement |title=NBA, players ratify new collective bargaining agreement |publisher=National Basketball Association |date=December 23, 2016 |access-date=January 15, 2017}}</ref> This agreement was set to run through the 2023–24 season, with either side able to opt out after the 2022–23 season.<ref name="Windhorst CBA">{{cite web |
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==Soft versus hard caps==
Unlike the [[National Football League|NFL]] and [[National Hockey League|NHL]], the NBA features a so-called soft cap, meaning that there are several significant exceptions that allow teams to exceed the salary cap to sign players. This is done to allow teams to keep their own players, which, in theory, fosters fan support in each individual city. By contrast, the NFL and NHL salary caps are considered hard, meaning that they offer relatively few (if any) circumstances under which teams can exceed the salary cap. The NBA and [[Major League Soccer|MLS]] version of the "soft" cap does, however, offer less leeway to teams than that of [[Major League Baseball]]. MLB allows teams to spend as much as they want on salary, but it penalizes them a percentage of the amount by which they exceed the soft cap. The percentage increases as the number of consecutive years a team exceeds the cap grows, resetting only when a team falls under the cap
== Luxury tax ==
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The luxury tax level for the [[2008–09 NBA season|2008–09]] season was $71.15 million.<ref name="nba.com"/> For the [[2009–10 NBA season|2009–10]] season, the luxury tax level was set at $69.92 million.<ref name="ReferenceA"/> The luxury tax level for the 2010–11 and 2012–13 NBA seasons was $70,307,000.<ref name=2012_13_cap>{{cite press release|title=NBA salary cap for 2012-13 season set at $58.044 million|publisher=National Basketball Association|date=July 10, 2012|url=http://www.nba.com/2012/news/07/10/nba-salary-cap-release/index.html?ls=iref:nbahpt2|archive-url=https://web.archive.org/web/20120714114551/http://www.nba.com/2012/news/07/10/nba-salary-cap-release/index.html?ls=iref:nbahpt2|archive-date=July 14, 2012|url-status=dead}}</ref>
The 2011 CBA instituted major changes to the luxury tax regime. The previous CBA had a dollar-for-dollar tax provision system, which remained in effect through the 2012–13 season. Teams exceeding the tax level were punished by being forced to pay one dollar to the league for each dollar by which their payroll exceeded the tax level. Starting in 2013–14, the tax changed to an incremental system. Under the current system, tax is assessed at different levels based on the amount that a team is over the luxury tax threshold.<ref>{{cite web|url=http://www.cbafaq.com/salarycap.htm#Q21|title=NBA Salary Cap FAQ|website=www.cbafaq.com|access-date=30 March 2018}}</ref> The scheme is not cumulative—each level of tax applies only to amounts over that level's threshold. For example, a team that is $8 million over the tax threshold will pay $1.50 for each of its first $5 million over the tax threshold, and $1.75 per dollar for the remaining $3 million. Starting in 2014–15, "repeat offenders", subject to additional penalties, are defined as teams that paid tax in previous seasons. In the first season, repeat offenders from in all previous three seasons paid a stiffer tax rate; from 2015 to 2016 thereafter, teams paying taxes in three out of four years are subject to the higher repeater rate.<ref name=cbafaq/> As in the previous CBA, the tax revenue is divided among teams with lower payrolls.<ref name="Bresnahan">{{cite news|url=
For the 2013–14 season, the luxury tax threshold was set at $71.748 million. The Brooklyn Nets, whose payroll for that season was projected to be over $100 million, would face a luxury tax bill above $80 million, resulting in a total payroll cost of $186 million.<ref>{{cite news|url=https://sports.yahoo.com/blogs/nba-ball-dont-lie/andrei-kirilenko-joins-brooklyn-nets-pay-186-million-001236302.html |title=Andrei Kirilenko joins the Brooklyn Nets, who will pay $186 million for their roster next season |first=Eric |last=Freeman |work=Ball Don't Lie |publisher=Yahoo! Sports |date=July 11, 2013 |access-date=July 16, 2013}}</ref>
=== Tax levels from
{| class="wikitable"
|-
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|}
The NBA's newest CBA, which
==Exceptions==
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Once a year, teams can use a mid-level exception (MLE) to sign a player to a contract for a specified maximum amount. The amount of the MLE and its duration depend on the team's cap status. In the 2017 CBA, the MLE was initially set at $8.406 million in the 2017–18 season for teams that are over the cap either before or after the signing, but under the [[#Luxury tax|luxury tax]] apron, set at $6 million above the tax line. Teams can use this exception to offer contracts of up to four years. Teams above the apron have an MLE initially set at $5.192 million, allowing contracts of up to three years. Teams with cap room, which were ineligible for the MLE before the 2011 CBA, have an MLE initially set at $4.328 million that allows two-year contracts. In subsequent seasons, all MLE amounts will be determined by applying the percentage change of the salary cap to the previous exception amount.<ref name="Coon 2017 CBA exceptions">{{cite web|url=http://www.cbafaq.com/salarycap.htm#Q25 |title=25. What are salary cap exceptions? |first=Larry |last=Coon |work=NBA Salary Cap FAQ |access-date=July 9, 2017}}</ref>
Before the 2011 NBA, the MLE was equal to the average NBA salary for all teams over the cap; teams with cap room were then ineligible for the MLE.<ref name=coon_11282011/> The Mid-Level Exception for the 2008–09 NBA season was $5.585 million.<ref name="nba.com">{{cite web|url=http://www.nba.com/news/salarycapset_080709.html |title=NBA Salary Cap for 2008–9 Season |
Under the 2017 NBA, the apron was initially set at $6 million above the tax line for the 2017–18 season. In a new feature, the apron changes from season to season, with the percentage change (up or down) set at half of the rate of change of the cap for that season.<ref name="Heat Hoops"/>
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===Rookie exception===
The NBA allows teams to sign their first-round draft choices to [[#Rookie scale salary|rookie "scale" contracts]] even if their payroll exceeds the cap.
===Second-round pick exception===
The 2023 CBA created the second-round pick exception which allows teams to sign their second-round draft picks for up to four years without counting against the cap until July 31 of the player's first season.<ref>{{cite web |last=Adams |first=Luke |title=Hoops Rumors Glossary: Second-Round Pick Exception |date=4 July 2023 |url=https://www.hoopsrumors.com/2023/07/hoops-rumors-glossary-second-round-pick-exception.html}}</ref>
The first second-round pick exception was executed by the Sacramento Kings when they signed No. 34 overall pick Colby Jones. <ref>{{cite web |url=https://www.forbes.com/sites/bryantoporek/2023/08/01/why-nba-teams-are-valuing-draft-picks-more-than-ever-before|website=www.forbes.com|access-date=2023-09-21|title=Why NBA Teams Are Valuing Draft Picks More Than Ever Before}}</ref>
===Two-way contracts===
The 2017 CBA introduced [[two-way contract]]s between NBA teams and players in the [[NBA G League]] (formerly the D-League). Before the 2017 CBA, all D-League players were contracted directly with the league, and all D-League players could be called up by any NBA team, regardless of whether they were affiliated with the player's D-League team. Now, each NBA team can sign two players to contracts that allow them to assign the players to the G League without risk of being "poached" by another NBA team. The players signed to such deals benefit by receiving a considerably higher salary than other G League players while in that league, as well as earning a prorated share of the NBA minimum rookie salary for each day they are with their contracted NBA team. Salaries of two-way players are not included in salary cap calculations.<ref name="2017 CBA FAQ 82">{{cite web|url=http://www.cbafaq.com/salarycap.htm#Q82 |title=82. What is a Two-Way player? |work=NBA Salary Cap FAQ |first=Larry |last=Coon |date=June 30, 2017 |access-date=July 19, 2017}}</ref> Additionally, a team can convert a two-way contract to a standard NBA contract at any time, with the player's salary becoming the NBA minimum for the player's years of service, prorated from the time of the conversion;<ref name="2017 CBA FAQ 83">{{cite web|url=http://www.cbafaq.com/salarycap.htm#Q83 |title=83. Can a Two-Way player be converted to a regular NBA player? Can a regular NBA player be converted to a Two-Way player? What is Exhibit 10? |work=NBA Salary Cap FAQ |first=Larry |last=Coon |date=June 30, 2017 |access-date=June 23, 2018}}</ref> a converted contract also does not count in cap calculations.<ref name="2017 CBA FAQ 82"/>
The 2023 CBA
====Exhibit 10====
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Related to the two-way contract, and also introduced in the 2017 CBA, is an attachment to the standard NBA contract known as Exhibit 10. A contract that contains this attachment may be converted to a two-way contract at the team's option. Exhibit 10 can be used only in one-year, non-guaranteed contracts for the minimum NBA salary, with no bonuses except for an "Exhibit 10 bonus" of $5,000 to $50,000. The bonus is paid if the player is waived by his NBA team, signs with the G League, is assigned to that NBA team's G League affiliate, and remains with the affiliate at least 60 days. The bonus is not counted against the salary cap, but is counted in overall league salaries. Each NBA team is limited to six active contracts that contain Exhibit 10 at any given time.<ref name="2017 CBA FAQ 83"/>
The 2023 CBA
===Larry Bird exception===
Perhaps the most well-known of the NBA's salary cap exceptions is the Larry Bird exception, so named because the [[Boston Celtics]] were the first team permitted to exceed the salary cap to re-sign one of their own players (in that case, [[Larry Bird]]). Free agents who qualify for this exception are called "qualifying veteran free agents" or "Bird Free Agents" in the CBA, and this exception falls under the terms of the Veteran Free Agent exception. In essence, the Larry Bird exception allows teams to exceed the salary cap to re-sign their own free agents, at an amount up to the [[#Maximum individual contracts under the CBA|maximum salary]]. To qualify as a Bird free agent, a player must have played three seasons without being waived or changing teams as a free agent. Players claimed after being [[#amnesty|amnestied]] have their Bird rights transferred to their new team. Other players claimed off [[#Waivers|waivers]] are not eligible for the full Bird exception, but may qualify for the early Bird exception. Prior to an arbitrator ruling in June 2012, all players that were waived and changed teams lost their Bird rights.<ref name="beck_06302012">{{cite news |last=Beck |first=Howard |author-link=Howard Beck |date=June 29, 2012 |title=Deal Gives Knicks Lift in Effort to Re-Sign Lin
====Early Bird exception====
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Ordinarily a team cannot engage in a trade which would leave it $100,000 above the salary cap, regardless of whether the trade reduces or increase its overall payroll, and requires exceptions in order to do so. The traded player exception is one of such.
The exception allows a team to trade for any player, or number of players, as long as their collective incoming salary does not exceed a set amount, which is based on whether if the team pays the luxury tax after the trade, and the collective outgoing (of the players the team is trading away) salary. Taxpaying teams can absorb up to '''125% of the outgoing salary + $100,000''', and for non-taxpayers the amount is as follows:
{| class="wikitable"
|+
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!Incoming Salary Allowed
|-
|$
|175% of the outgoing salary
|-
|$6,533,
|Outgoing salary + $5,000,000
|-
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===Rookie scale salary=== <!-- linked from "Rookie exception" section-->
First-round draft choices are assigned salaries according to their draft position. The first overall pick receives more than the second pick, the second more than the third, and so on. Each contract is for two years, with a team option for the third and fourth seasons (CBAs before 2011 provided for three-year contracts with an option for the fourth season), with built-in raises every year to compensate for increases in the average salary. A team may elect to exceed rookie scale for a drafted player that was unsigned for which they retained his draft rights three seasons after the draft. The contract would be for at least three seasons, with a maximum value up to the team's available cap room.<ref>{{cite news|title=Splitter: The Difference|date=April 23, 2009|work=ESPN|url=
In 2017, the scale for lottery picks was as follows:
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</timeline>
Second-round picks are not subject to a scale, and technically can be paid anywhere from the minimum to the maximum contract amount.
Prior to the 2017 CBA, the rookie scales for each season were negotiated into the agreement. For the current agreement, only the rookie scales for the 2017–18 season were determined in advance. In subsequent seasons, the percentage change in the salary cap will be applied to all dollar amounts in the previous season's scale. Amounts that are expressed as a percentage of salary, such as the allowable salary change from the third to the fourth season of the rookie contract, remain the same from season to season.<ref>{{cite web|last=Coon|first=Larry|title=47. First
===Designated Player===<!--This section is linked from [[Designated player (NBA)]]-->
Since the 2011 CBA, each NBA team has been able to nominate a player on his rookie contract to receive a "Designated Player" contract extension. A Designated Player is eligible for a five-year contract extension, instead of being held to the standard four-year restriction.<ref name="coon_11282011"/> From 2011 through the 2016–17 season, a team could only allocate a single Designated Player contract at any one time (if a team had already extended a rookie contract by using the Designated Player extension, they could not create a second Designated Player contract until the current contract expired, or until the player moved to a different team); however the 2011 CBA allowed teams to sign a second Designated Player from another team in addition to the one they already had. All teams were limited to having a maximum of two Designated Players contracted on their roster at any time (one
Under the 2017 CBA, the "Designated Player" limit remained at two, but in a new feature, teams are now able to create Designated Player contracts from their own veteran contracts. In addition, teams may now use their Designated Player slots on any combination of their own rookie contracts, their own veteran contracts, or players acquired in trades.<ref name="Windhorst CBA"/>
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===="Derrick Rose" Rule====<!--This section is linked from [[Derrick Rose Rule]]-->
[[Image:Derrick Rose 02.jpg|thumb|left|In a rule named after [[Derrick Rose]], accomplished players coming off their rookie contract could earn more money in the 2011 CBA.]]
A Designated Player coming off his rookie contract may be eligible to earn 30% of the salary cap (rather than the standard 25%) if he attains certain criteria. Through the 2017–18 season, in order to be eligible, the player must be voted to start in two [[NBA All-Star Game|All-Star Games]], or be named to an [[All-NBA Team]] twice (at any level), or be named [[NBA Most Valuable Player Award|MVP]]. Officially titled the "5th Year 30% Max Criteria",<ref name=":1">Coon, Larry (2012); "[http://www.cbafaq.com/salarycap.htm#Q58 NBA Salary Cap/Collective Bargaining Agreement FAQ 58: Rookie scale contract extensions]." Accessed
The 2017 CBA changed the qualification criteria for "5th Year, 30% Max" contracts. Players who come off rookie contracts at the end of the 2017–18 season, or later, must meet any of the following criteria to qualify:<ref>{{cite web|url=http://3c90sm37lsaecdwtr32v9qof.wpengine.netdna-cdn.com/wp-content/uploads/2016/02/2017-NBA-NBPA-Collective-Bargaining-Agreement.pdf |title=Article II, Section 7(a)(i)(B): Maximum Annual Salary |work=2017 NBA Collective Bargaining Agreement |page=36 |publisher=[[National Basketball Players Association]] |access-date=April 6, 2017}}</ref>
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=====5/30% Contracts=====
The following players have signed
; Under the 2011 CBA
* [[Derrick Rose]] (signed with the Chicago Bulls; was later traded to the New York Knicks during the last year on that deal) until 2017 (qualified by winning the 2011 MVP award)
* [[Blake Griffin]] (signed with the L.A. Clippers; was later traded to the Detroit Pistons in 2018) signed through 2018 (qualified by making the All-NBA second team in 2011–12 and 2012–13)
* [[Paul George]] (signed with Indiana Pacers; since has been traded to the Oklahoma City Thunder and then to the Los Angeles Clippers prior to the 2019 season) signed until 2019 (qualified by making the All-NBA third team in 2012–13 and 2013–14)<ref name=":17">Feldman, Dan
;Under the 2017 CBA
* [[Luka Dončić]] (signed with the Dallas Mavericks in the 2021 offseason), signed from 2022 to 2023 through 2026–27. Under the current 5/30% criteria, he was the first player to have been eligible for such a contract before signing, as he had been named to the All-NBA first team in 2019–20 and 2020–21.<ref>{{cite news |
=====5/25% Contracts=====
In addition the following players are known to have signed
* [[Joel Embiid]] (Philadelphia 76ers) until 2023
* [[Russell Westbrook]] (Oklahoma City Thunder) until 2017
*[[
* [[
* [[James Harden]] (Houston Rockets) until 2018
* [[Kyrie Irving]] (Boston Celtics) until 2020
*[[Damian Lillard]] (Portland Trail Blazers) until 2021
[[Kevin Love]] was eligible for a designated player contract, but the Minnesota Timberwolves opted<ref>Wojnarowski, Adrian. [https://sports.yahoo.com/news/nba--kevin-love-remains-unsure-about-timberwolves--future-200009299.html "Kevin Love unsure about Timberwolves' future"] Yahoo.com. Accessed
===="Supermax" Rule====
For a veteran player to qualify for such an extension, he must be entering his eighth or ninth season in the NBA, and have either:
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Additionally, the team offering the extension must have originally drafted the player, or obtained him in a trade while he was on his rookie contract.<ref name="Windhorst CBA"/>
Players who qualify can be offered contracts with a starting salary between 30 and 35% of the salary cap. The extension cannot last more than five years after the expiration of the player's current contract (or five years for a player who is a free agent when signed), but can be negotiated and signed one year before the current contract expires. The extension can be offered to a team's own free agent as well as a player with time left on his contract.<ref name="Heat Hoops"/> Additionally, once a player signs a DVPE, he cannot be traded for one year.<ref name="Cousins FAQ">{{cite web |
Ironically, while the rule was intended to encourage star players to stay with their current teams, the first major move by an NBA team involving a player eligible for the DVPE was the [[Sacramento Kings]]' trade of [[DeMarcus Cousins]] to the [[New Orleans Pelicans]] during the [[2017 NBA All-Star Game|2017 All-Star]] break. Cousins' contract with the Kings was not set to expire until 2018, but he was eligible to sign a DVPE after the 2016–17 season for up to $209 million over five years, a financial commitment that the Kings were apparently unwilling to make.<ref name="Cousins FAQ"/>
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===== Players eligible for the supermax =====
Following the announcement of the 2016–17 All-NBA team, four players were eligible to sign DVPE contracts during the 2017 offseason. All four were named to one of the three All-NBA teams for that season; two were already eligible under the new criteria.<ref name="Windhorst 2017-05-19">{{cite news |
* [[Stephen Curry]], Golden State Warriors (met DVPE criteria before the 2016–17 season)
* [[James Harden]], [[
* [[
* [[Russell Westbrook]], [[Los Angeles Clippers]] (met DVPE criteria before the 2016–17 season while with the [[Oklahoma City Thunder]])
Harden and Westbrook would not have qualified under the standard DVPE criteria because both signed extensions to their contracts in the 2016 offseason, Harden for two years and Westbrook for one. The players' union and owners negotiated a special dispensation allowing them to sign DVPE contracts should they otherwise qualify.<ref name="Windhorst 2017-05-19"/>
The next player to qualify for a supermax contract was [[Anthony Davis]], who at the time had played his entire NBA career with the [[New Orleans Pelicans]]. He qualified by being named to the All-NBA first team in {{NBAy|2017}}, enabling the Pelicans to offer him a five-year extension worth up to $230 million, effective with the 2019–20 season.<ref>{{cite news |
During the 2019 season, four further players qualified for supermax deals. [[Damian Lillard]] and [[Kemba Walker]] both qualified to immediately sign supermax deals by making a 2018–19 All-NBA Team. While [[Giannis Antetokounmpo]] would not have become a free agent until the 2021 offseason, he became eligible to sign a supermax deal in 2020 by making All-NBA Teams in both 2017–18 and 2018–19;<ref>{{cite web|url=https://bleacherreport.com/articles/2838283-ranking-every-nba-supermax-contract#slide0 |title=Ranking Every NBA Supermax Contract |first=Andy |last=Bailey |website=Bleacher Report |date=May 29, 2019 |access-date=August 10, 2019}}</ref> he would later meet another supermax criterion by being named the 2019 MVP.<ref>{{cite web|url=https://www.nba.com/article/2019/07/01/bucks-looking-toward-summer-2020-giannis |title=Summer of 2020 takes on additional importance for Bucks |first=Steve |last=Aschburner |website=NBA.com |date=July 1, 2019 |access-date=August 10, 2019}}</ref> [[Rudy Gobert]] became eligible by claiming Defensive Player of the Year honors for the second straight season.<ref>{{cite news|url=https://kslsports.com/448905/report-gobert-willing-to-take-less-than-supermax/ |title=Report: Gobert Willing To Take Less Than Supermax |first=Ben |last=Anderson |website=KSLsports.com |date=December 17, 2020 |access-date=December 17, 2020}}</ref> The [[Charlotte Hornets]] did not offer Walker a supermax deal, instead sending him to the [[Boston Celtics]] in a sign-and-trade deal in the 2019 offseason.<ref>{{cite press release|url=https://www.nba.com/celtics/news/pressrelease/celtics-acquire-three-time-all-star-kemba-walker |title=Celtics Acquire Three-Time All-Star Kemba Walker |publisher=Boston Celtics |date=July 6, 2019 |access-date=August 10, 2019}}</ref> Gobert signed a five-year extension with the [[Utah Jazz]] in the 2020 offseason, but chose not to take the full supermax of $228 million, instead opting for $205 million to give the team more cap room.<ref>{{cite news |
=====Supermax contracts=====
The first player to sign a supermax contract was Stephen Curry, who agreed to a new five-year DVPE deal with the Warriors, worth $201 million, that runs through the 2021–22 season. Curry signed the contract once the NBA's free agency moratorium ended on July 6, 2017.<ref>{{cite news |
Shortly thereafter, James Harden agreed on a DVPE with the Rockets. At the time of signing, his current contract had two years remaining with total pay of $59 million; the extension added another $170 million over four seasons, ending in 2022–23.<ref>{{cite news |
The next supermax signing was that of John Wall, who agreed later in July to a four-year, $170 million extension that began in 2019–20.<ref>{{cite news |
Damian Lillard agreed to a four-year, $196 million extension with the [[Portland Trail Blazers]] during the 2019 offseason. The extension starts in 2021–22 and includes a player option for 2024–25.<ref>{{cite press release|url=https://www.nba.com/blazers/news/2019/7/6/blazers-sign-damian-lillard-to-multi-year-extension |title=Blazers Sign All-Star Guard Damian Lillard to Multi-Year Contract Extension |publisher=Portland Trail Blazers |date=July 6, 2019 |access-date=August 10, 2019}}</ref>
The largest supermax signing was that of Giannis Antetokounmpo, who agreed to a five-year, $228 million extension with the [[Milwaukee Bucks]] during the 2020 offseason. The extension starts in 2021–22 and includes a player option for 2025–26.<ref>{{cite news |
===Over-38 rule===
The cap also includes a provision to close a potential loophole that would provide incentives for teams to skirt the cap by signing an older player to a long-term deal that would not end until after the team expects the player to retire. Cap analyst Larry Coon outlined how this potential loophole would work:<ref name=CoonOver38>{{cite web|url=http://www.cbafaq.com/salarycap.htm#Q56 |title=56. What is the "Over-38" rule? |work=NBA Salary Cap FAQ |first=Larry |last=Coon |access-date=July 2, 2017}}</ref><blockquote>For example, suppose the Non-Taxpayer Mid-Level exception is $9 million. With 5% raises, a three-year contract would total $28.35 million. But if they added a fourth year to the contract, the salary would total $38.7 million. If the player retires after three seasons and continues drawing his salary for the additional season, then he effectively will be paid $38.7 million for three years' work. In essence, they are giving the player a three-year contract with additional deferred compensation.</blockquote>
To address this issue, CBAs since at least the 1990s have included what is now called the "over-38 rule", under which certain contracts that extend past the player's 38th birthday{{efn|For the purposes of the over-38 rule only, seasons start on October 1. A player's age for a contract year is considered to be his age as of September 30.<ref name=CoonOver38/>}} are presumed to cover seasons following the player's expected retirement. The age threshold that triggered this rule was originally set at 35, changed to 36 in the 1999 CBA, and changed again to 38 in the 2017 CBA. The salary for any years that come after the player's 38th birthday is presumed to be deferred compensation, and is shifted for cap purposes to the under-38 seasons of the deal, with the over-38 year(s) being referred to as "zero years" in the CBA. If the player continues to play under the deal (proving the presumption of retirement wrong), the
While the threshold age was changed in the 2017 CBA, the mechanics of the rule remained the same. Notably, several members of the union's executive committee at the time the 2017 CBA was negotiated were older players who were seen as potential major beneficiaries of a change to an over-38 rule. For example, the change to an over-38 rule gave union president [[Chris Paul]], scheduled to become a free agent after the 2016–17 season, a potential gain of nearly $50 million over the life of his next contract. Similarly, executive committee members [[LeBron James]] and [[Carmelo Anthony]], who could opt out of their current contracts after the same season, had the potential for similar gains with this change.<ref name="Windhorst CBA"/><ref name="Heat Hoops"/>
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The 2017 CBA changed the accounting rules for the player's original team in this scenario. If the original team matches, and has enough cap space to absorb the average annual salary of the offer, it can choose to take cap hits of either the actual contract payouts or the average of the contract in each season.<ref name="Heat Hoops"/>
Before the 2005 CBA, the original team could only use an exception to re-sign a player who had been drafted in the first round. The 2005 CBA allowed teams to use exceptions on non-first-round picks, with the extension named the "Gilbert Arenas Rule". In 2003, [[Gilbert Arenas]], who had been a second-round pick in [[2001 NBA draft|2001]], signed a six-year, $60 million contract with the [[Washington Wizards]] after his original team, the [[Golden State Warriors]], were unable to match the offer since they were over the salary cap.<ref>{{cite news |last=Hu |first=Janny |title=Final looks in store for Warrick, Granger |date=June 23, 2005 |newspaper=San Francisco Chronicle |page=D-3 |url=http://www.sfgate.com/cgi-bin/article.cgi?f=/chronicle/archive/2005/06/23/SPG47DDGAC1.DTL |archive-url=https://
===July moratorium===
Players on a team's season-ending roster remain under contract with their respective team until the start of the new league year on July 1.<ref>{{cite news|title=Hawks letter names Paul, Howard|date=June 5, 2013|work=ESPN|url=
*[[#Rookie scale salary|Rookie scale contracts]] to first-round draft picks.
*A second-round draft pick can accept a required tender, which is a one-year contract that teams are required to offer in order to retain their rights to the player.
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*Teams may sign players to two-way contracts, convert a two-way contract to a standard NBA contract, or convert a standard NBA contract with an Exhibit 10 bonus to a two-way contract<ref name=cbafaq/>
During the moratorium, teams are restricted from commenting on deals.<ref>{{cite news|last=Beck|first=Howard|title=With Eye on Williams, Nets to Acquire Johnson|date=July 2, 2012|newspaper=The New York Times|url=https://www.nytimes.com/2012/07/03/sports/basketball/with-eye-on-williams-nets-agree-to-acquire-joe-johnson.html|archive-url=https://web.archive.org/web/20220620053018/https://www.nytimes.com/2012/07/03/sports/basketball/with-eye-on-williams-nets-agree-to-acquire-joe-johnson.html?_r=1|archive-date=June 20, 2022|url-status=live}}</ref> Teams and players can reach verbal agreements, but they are not binding. Contracts can be signed once the moratorium ends.<ref name=cbafaq/> In 2015, [[DeAndre Jordan]] had reached a verbal agreement to sign with the [[Dallas Mavericks]], but changed his mind at the end of the moratorium and re-signed with the [[Los Angeles Clippers]].<ref>{{cite news|last=Morales|first=Robert|title=Adam Silver says
===Cap holds===
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===Stretch provision===
Both the 2005 and 2011 CBAs contained a so-called "stretch" provision regarding the payment of guaranteed money to waived players and its effect on the salary cap; the 2011 provisions were kept in the 2017 CBA.
Under the 2005 CBA, players and teams could alter the schedule of payments to waived players by mutual agreement. The remaining guaranteed salary was equally spread across the remaining years of the player's contract.<ref name=coon_11282011/>
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The NBA Amnesty Clause provided franchises a means of escaping a contractual obligation to a player whose performance falls far short of the extremely large salary they initially agreed to pay him.
{{anchor|Allan Houston Rule}}Under the 2005 CBA, one player could be waived prior to the start of the [[2005–06 NBA season|2005–06 season]] and not count toward the luxury tax. Unlike the 2011 CBA, the player still counted under the salary cap.<ref name=coon_11282011/> The 2005 amnesty provision was derisively named the "[[Allan Houston]] Rule", but his team, the [[New York Knicks]], did not actually use the measure on Houston—they instead applied it to [[Jerome Williams (basketball)|Jerome Williams]] because Allan Houston later retired for medical reasons the same season.<ref>{{cite news |last=Aldridge |first=David |title=No amnesty from preseason speculation engulfing league |work=NBA.com |date=December 2, 2011 |url=http://www.nba.com/2011/news/features/david_aldridge/12/01/amnesty/ |archive-url=https://web.archive.org/web/20151025193358/http://www.nba.com/2011/news/features/david_aldridge/12/01/amnesty/ |archive-date=October 25, 2015 |url-status=dead }}</ref> Jerome Williams
Under the 2011 Collective Bargaining Agreement (CBA), each franchise was allowed to waive one player prior to the start of any season between the 2011–12 and 2015–16 seasons. The remaining salary still contractually owed
{| class="wikitable"
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|-
| {{n/a}}
| Denotes the player
|-
|}
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! class="unsortable"|Ref
|-
| rowspan=18|{{nbay|2005|full}} || [[Dallas Mavericks]] || {{sortname|Michael|Finley}}|| rowspan=18|<ref name="2005 amnesty">{{cite web|url=https://www.sports-reference.com/blog/list-of-nba-players-waived-in-2005-under-allan-houston-rule-amnesty-clause/|title=List of NBA Players Waived in 2005 Under
|-
| [[Los Angeles Lakers]] || {{sortname|Brian|Grant}}
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| [[Portland Trail Blazers]] || {{sortname|Brandon|Roy}} || [[Minnesota Timberwolves]]<ref group=upper-roman>Roy initially retired from basketball due to persistent knee injuries and was then amnestied by Portland. However, after a year of inactivity, he returned to the NBA.</ref> || {{n/a}}
|-
| rowspan=8|{{nbay|2012|full}} || [[Philadelphia 76ers]] || {{sortname|Elton|Brand}} ||bgcolor=CFECEC|[[Dallas Mavericks]]* || $2,100,000 || <ref>{{cite news|last=Stein|first=Mark|title=Mavericks claim Elton Brand|date=July 13, 2012|work=ESPN|url=
|-
| [[Minnesota Timberwolves]] || {{sortname|Darko|Miličić}} || [[Boston Celtics]] || {{n/a}} ||<ref>{{cite news|last=Remme|first=Mark|title=Wolves Waive Darko Milicic|date=July 12, 2012|work=NBA.com|url=http://www.nba.com/timberwolves/news/wolves-waive-darko-milicic-0|archive-url=https://web.archive.org/web/20120715023941/http://www.nba.com/timberwolves/news/wolves-waive-darko-milicic-0|archive-date=July 15, 2012|url-status=live}}</ref>
|-
| [[Dallas Mavericks]] || {{sortname|Brendan|Haywood}} ||bgcolor=CFECEC|[[Charlotte Bobcats]]* || $2,000,500 ||<ref>{{cite news|last=Caplan|first=Jeff|title=Mavs officially use amnesty on Brendan Haywood|work=ESPN|url=
|-
| [[Houston Rockets]] || {{sortname|Luis|Scola}} ||bgcolor=CFECEC|[[Phoenix Suns]]* || $13,500,000 ||<ref>{{cite news|title=Suns claim Luis Scola off waiver wire, amnesty Josh Childress|date=July 16, 2012|work=SI.com|agency=Associated Press|url=http://sportsillustrated.cnn.com/2012/basketball/nba/07/15/suns-luis-scola-amnesty-auction.ap/index.html|archive-url=https://web.archive.org/web/20120719082543/http://sportsillustrated.cnn.com/2012/basketball/nba/07/15/suns-luis-scola-amnesty-auction.ap/index.html|archive-date=July 19, 2012|url-status=
|-
| [[Phoenix Suns]] || {{sortname|Josh|Childress}} || [[Brooklyn Nets]] || {{n/a}} || <ref>{{cite news|last=Young|first=Royce|title=Suns claim Luis Scola off waiver wire, amnesty Josh Childress|work=CBS Sports|url=http://www.cbssports.com/nba/blog/eye-on-basketball/19591424/suns-claim-luis-scola-off-waiver-wire-amnesty-josh-childress}}</ref>
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| [[Los Angeles Clippers]] || {{sortname|Ryan|Gomes}} || {{flagicon|GER}} [[Artland Dragons]] || {{n/a}} || <ref>{{cite news|url=http://www.nba.com/2012/news/07/18/clippers-gomes-waived.ap/index.html|title=Clippers waive Gomes as amnesty player|work=NBA.com|publisher=Turner Sports Interactive, Inc.|date=July 18, 2012|access-date=July 18, 2012|url-status=dead|archive-url=https://web.archive.org/web/20120718203742/http://www.nba.com/2012/news/07/18/clippers-gomes-waived.ap/index.html|archive-date=July 18, 2012}}</ref>
|-
| rowspan=5|{{nbay|2013|full}} || [[Los Angeles Lakers]] || {{sortname|Metta|World Peace}} || [[New York Knicks]] || {{n/a}} || <ref>{{cite news|url=
|-
| [[Charlotte Bobcats]] || {{sortname|Tyrus|Thomas}} || [[Iowa Energy]] || {{n/a}} || <ref>{{cite
|-
| [[Milwaukee Bucks]] || {{sortname|Drew|Gooden}} || [[Washington Wizards]] || {{n/a}} || <ref>{{cite news| url=https://www.sbnation.com/nba/2013/7/17/4531136/2013-nba-free-agency-rumors-news|publisher=SB Nation|date=July 17, 2013|title=NBA Free Agency rumors}}</ref>
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| [[Toronto Raptors]] || {{sortname|Linas|Kleiza}} || {{flagicon|TUR}} [[Fenerbahçe Men's Basketball|Fenerbahçe Ülker]] || {{n/a}} || <ref>{{cite news| url=https://sports.yahoo.com/news/nba--raptors-to-amnesty-linas-kleiza-084703294.html|publisher=Yahoo!|date=July 16, 2013|title=Raptors to amnesty Linas Kleiza}}</ref>
|-
| [[Miami Heat]] || {{sortname|Mike|Miller|dab=basketball,
|-
| {{nbay|2014|full}} || [[Chicago Bulls]] || {{sortname|Carlos|Boozer}} ||bgcolor=CFECEC|[[Los Angeles Lakers]]* || $3,200,000 || <ref>{{cite news|last=Johnson|first=K. C.|title=Bulls use amnesty provision on Boozer|date=July 15, 2014|newspaper=Chicago Tribune|url=http://www.chicagotribune.com/sports/basketball/bulls/chi-bulls-use-amnesty-provision-on-carlos-boozer-20140715,0,4360207.story|archive-url=https://web.archive.org/web/20140716221146/http://www.chicagotribune.com/sports/basketball/bulls/chi-bulls-use-amnesty-provision-on-carlos-boozer-20140715,0,4360207.story|archive-date=July 16, 2014|url-status=live}}</ref>
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{{DEFAULTSORT:Nba Salary Cap}}
[[Category:
[[Category:Income of sportspeople]]
[[Category:Rules of the National Basketball Association]]
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