The NBA’s upper and lower salary limits, luxury tax threshold, and hard cap have been revealed for the upcoming season. Let’s dive into the details.
Such is life with the confoundingly beautiful beast known as the NBA collective bargaining agreement, a document that often seems as if it contains more exceptions than actual rules. From salary caps to salary floors, from soft caps to hard caps, from luxury tax aprons to luxury tax chef’s hats — I made that last one up, but you could easily make it a thing, Adam Silver — there’s a lot to internalize. And we just got our hands on the latest numbers for 2022-23.
Let Boardroom guide you through the details. Welcome to NBA salary cap 2022-23.
2022-23 NBA Salary Cap Details
The league has set the salary cap at $123,655,000. This is a “soft cap,” which means teams may spend above it based on certain exceptions written into the CBA, the most popular being the mid-level exception (MLE). Compared to last season’s figure of $112,400,000, that’s an increase of just over 10%.
The MLE allows teams to go above the salary cap to sign free agents. There are three varieties with three different salary values: The non-taxpayer mid-level exception for teams below the luxury tax limit ($10.49 million), the taxpayer mid-level exception for teams above the tax limit ($6.479 million), the room exception for teams below the soft salary cap ($5.401 million).
Any team can sign a free agent to a minimum contract if they have a free roster spot — unless they’re considered “hard-capped.” More on that below.
The “salary floor,” or the minimum team payroll spending required for compliance with the CBA, has been set at $111.29 million — 90% of the cap.
The luxury tax line is $150.267 million. The luxury tax apron — a hard cap that teams using certain exceptions to sign players cannot exceed under any circumstance — is typically $6 million over the tax line and estimated to be $156.983 million for the 2022-23 season.
Three scenarios result in a team being hard-capped: (1) signing a free agent with the non-taxpayer mid-level exception, (2) signing a free agent with the bi-annual exception, (3) acquiring a free agent via sign-and-trade.
Yes, if a team doesn’t sign a player using the three methods listed immediately above, they are not considered hard-capped and the apron does not apply to them.
It’s a hard cap only for certain teams, so in a manner of speaking, yes. Note that the Warriors, who were not hard-capped, spent $20 million beyond the luxury tax apron in 2021-22.