![\"A](\"https:\/\/www.rawchili.com\/nba\/wp-content\/uploads\/2026\/02\/USATSI_25906066-1024x683.jpg\")
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The NBA has a salary cap, but is it really a cap? Jerome Miron \/ Imagn Images<\/p>\n
Throughout the NBA season, several terms are casually thrown around when it comes to team and league finances. That\u2019s especially true around the trade deadline, draft and start of free agency.<\/p>\n
Here\u2019s a quick (but far from complete) guide to what a few of those terms mean and how they impact team building. (You can keep track of teams\u2019 current payroll here via Spotrac<\/a>, and if you really want to dive into all of the finance rules set by the most recent collective bargaining agreement, that can be found here<\/a>.)<\/p>\n Salary cap<\/p>\n This is the limit to the total amount of money teams are allowed to spend on players. But the NBA utilizes a \u201csoft cap,\u201d which allows teams to exceed that limit via various exceptions (such as the taxpayer and non-taxpayer midlevel exceptions) and other rules. The salary cap is set at $154.6 million for the 2025-26 season.<\/p>\n Luxury tax<\/p>\n A team payroll threshold, set at $187.9 million for the 2025-26 season. Having a team payroll above the luxury tax does not actually bring any constraints other than the tax that ownership pays to the league. Non-taxpaying teams receive 50 percent of the total tax payments paid for that season (split evenly); teams that pay the tax do not receive anything. (That amounted to about $11.5 million per non-tax team last season.)<\/p>\n First apron<\/p>\n A team payroll threshold, set at $195.9 million in 2025-26. Teams above the first apron:<\/p>\n Cannot take on more overall salary in a trade than they send out with their outgoing players (though front offices can sometimes get around that by structuring a transaction as multiple separate trades) A team payroll threshold set at $207.9 million in 2025-26. Teams above the second apron face all of the above first-apron restrictions, plus they:<\/p>\n Cannot aggregate multiple players together in a trade to match salary Feb 5, 2026<\/p>\n Connections: Sports Edition<\/p>\n Spot the pattern. Connect the terms<\/p>\n Find the hidden link between sports terms<\/p>\n Play today’s puzzle<\/p>\n","protected":false},"excerpt":{"rendered":"The NBA has a salary cap, but is it really a cap? Jerome Miron \/ Imagn Images Throughout…\n","protected":false},"author":2,"featured_media":583963,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_share_on_mastodon":"0"},"categories":[5],"tags":[7,6,12,10],"class_list":{"0":"post-583962","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-nba-draft","8":"tag-basketball","9":"tag-nba","10":"tag-nba-draft","11":"tag-sports-business"},"share_on_mastodon":{"url":"https:\/\/channels.im\/@nba\/116017934000063199","error":""},"_links":{"self":[{"href":"https:\/\/www.rawchili.com\/nba\/wp-json\/wp\/v2\/posts\/583962","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.rawchili.com\/nba\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.rawchili.com\/nba\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.rawchili.com\/nba\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.rawchili.com\/nba\/wp-json\/wp\/v2\/comments?post=583962"}],"version-history":[{"count":0,"href":"https:\/\/www.rawchili.com\/nba\/wp-json\/wp\/v2\/posts\/583962\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.rawchili.com\/nba\/wp-json\/wp\/v2\/media\/583963"}],"wp:attachment":[{"href":"https:\/\/www.rawchili.com\/nba\/wp-json\/wp\/v2\/media?parent=583962"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.rawchili.com\/nba\/wp-json\/wp\/v2\/categories?post=583962"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.rawchili.com\/nba\/wp-json\/wp\/v2\/tags?post=583962"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
\nCannot sign a player waived during the season whose salary was richer than the non-taxpayer midlevel exception (set at $14.1 million in 2025-26)
\nCannot acquire a player via sign-and-trade or use a trade exception created the previous season, even if it has not expired yet
\nCan only use the smaller taxpayer midlevel exception ($5.7 million this season) to sign players
\nCannot use that taxpayer midlevel exception to bring in players via trade or waivers
\nSecond apron<\/p>\n
\nCannot send cash in trades or use the taxpayer midlevel exception to sign players
\nCannot send out their own player via sign-and-trades to add another team\u2019s player
\nCannot trade draft picks seven years into the future, and if a team finishes a season with a payroll above the second apron in three of five years, future draft picks can be frozen or moved to the end of the first round<\/p>\n<\/p>\n