The CBA Glossary

Maximum player salary

An NBA player's maximum salary is determined by several factors, including years of experience and the size of their previous contract. But the main determining factor is the size of the salary cap itself.

The first point to note here is that a player's maximum salary is never less than 105% of their previous salary. Whatever else the salary cap does, the max is never less than that.

The second point to note, though, is that it is usually much more than that.

Maximum Annual Salary. (a) Notwithstanding any other provision of this Agreement, no Player Contract entered into on or after the effective date of this Agreement may provide for a Salary plus Unlikely Bonuses in the first Season covered by the Contract that exceeds the following amounts: (i) for any player who has completed fewer than seven (7) Years of Service, the greater of (x) twenty-five percent (25%) of the Salary Cap in effect at the time the Contract is executed, or (y) one hundred five percent (105%) of the Salary for the final Season of the player’s prior Contract; provided, however, that a player who has four (4) Years of Service as of the June 30 following the end of the last Season covered by his Player Contract (“5th Year Eligible Players”) shall be eligible to receive from his Prior Team up to thirty percent (30%) of the Salary Cap in effect at the time the Contract is executed if the player has met at least one of the following criteria (the “Higher Max Criteria”) as of the July 1 following the player’s fourth Season: (A) the player was named to the All-NBA first, second, or third team, or was named Defensive Player of the Year, in the immediately preceding Season or in two (2) Seasons during the immediately preceding three (3) Seasons; or (B) the player was named NBA MVP during one of the immediately preceding three (3) Seasons; (ii) for any player who has completed at least seven (7) but fewer than ten (10) Years of Service, the greater of (x) thirty percent (30%) of the Salary Cap in effect at the time the Contract is executed, or (y) one hundred five percent (105%) of the Salary for the final Season of the player’s prior Contract; provided, however, that a player who has eight (8) or nine (9) Years of Service at the time the Contract is executed and rendered such Years of Service for the Team with which he first executed a Player Contract (or, if he was under a Player Contract for more than one Team during such period, changed Teams only by trade during the first Article II 37 four (4) Salary Cap Years in which he was under a Player Contract) shall be eligible to enter into a Designated Veteran Player Contract pursuant to which he receives from his Prior Team up to thirty-five percent (35%) of the Salary Cap in effect at the time the Contract is executed if the player has met at least one of the Higher Max Criteria at the time his Contract is executed; or (iii) for any player who has completed ten (10) or more Years of Service, the greater of (x) thirty-five percent (35%) of the Salary Cap in effect at the time the Contract is executed, or (y) one hundred five percent (105%) of the Salary for the final Season of the player’s prior Contract. (b) Notwithstanding any other provision of this Agreement, no Renegotiation may provide for a Salary plus Unlikely Bonuses in the Renegotiation Season (as defined in Article VII, Section 7(c)) that exceeds the following amounts: (i) for any player who has completed fewer than seven (7) Years of Service, the greater of (x) twenty-five percent (25%) of the Salary Cap in effect at the time the Renegotiation is executed, or (y) one hundred five percent (105%) of the Salary for the Season prior to the Renegotiation Season; (ii) for any player who has completed at least seven (7) but fewer than ten (10) Years of Service, the greater of (x) thirty percent (30%) of the Salary Cap in effect at the time the Renegotiation is executed, or (y) one hundred five (105%) of the Salary for the Season prior to the Renegotiation Season; or (iii) for any player who has completed ten (10) or more Years of Service, the greater of (x) thirty-five percent (35%) of the Salary Cap in effect at the time the Renegotiation is executed, or (y) one hundred five percent (105%) of the Salary for the Season prior to the Renegotiation Season. (c) The parties recognize that it may not be possible to ascertain at the time an Extension is executed whether the Salary plus Unlikely Bonuses 38 Article II called for in the first Season of the extended term will exceed the Maximum Annual Salary set forth in this Section 7. Accordingly, and notwithstanding any other provision of this Agreement, the following rule shall apply to any Extension in which the extended term begins on or after the effective date of this Agreement: if, on July 1 of the Salary Cap Year encompassing the first Season of the extended term of such Extension, the Salary plus Unlikely Bonuses provided for in such Season exceeds the following amounts: (i) for any player who has completed fewer than seven (7) Years of Service, the greater of (x) twenty-five percent (25%) of the Salary Cap in effect on July 1 of the Salary Cap Year encompassing the first Season of the extended term of such Extension, or (y) one hundred five percent (105%) of the Salary provided for in the final Season of the original term of the Contract; provided, however, that a 5th Year Eligible Player who signed a Rookie Scale Extension in accordance with Section 7(d) below shall be eligible to receive the percentage that is agreed upon by the Team and player, which shall be no less than twenty-five percent (25%) or greater than thirty percent (30%) of the Salary Cap in effect on July 1 of the Salary Cap Year encompassing the first Season of the extended term of such Extension if the player has met at least one of the Higher Max Criteria; (ii) for any player who has completed at least seven (7) but fewer than ten (10) Years of Service, the greater of (x) thirty percent (30%) of the Salary Cap in effect on July 1 of the Salary Cap Year encompassing the first Season of the extended term of such Extension, or (y) one hundred five percent (105%) of the Salary provided for in the final Season of the original term of the Contract; provided, however, that a player who (A) has one Season, or two Seasons (including any Option Year), remaining on his Contract, and (B) has seven (7) or eight (8) Years of Service at the time the Extension is executed (i.e., a player entering their 8th or 9th year in the NBA), and (C) rendered such Years of Service for the Team with which he first executed a Player Contract (or, if he was under a Player Contract for more than one Team during such period, changed Teams only by trade during the first four (4) Salary Cap Years in which he was Article II 39 under a Player Contract) shall be eligible to enter into a Designated Veteran Player Extension pursuant to which the player receives the percentage that is agreed upon by the Team and player, which shall be no less than thirty percent (30%) and no greater than thirty-five percent (35%) of the Salary Cap in effect on July 1 of the Salary Cap Year encompassing the first Season of the extended term of such Extension if the player has met at least one of the Higher Max Criteria; or (iii) for any player who has completed ten (10) or more Years of Service, the greater of (x) thirty-five percent (35%) of the Salary Cap in effect on July 1 of the Salary Cap Year encompassing the first Season of the extended term of such Extension, or (y) one hundred five percent (105%) of the Salary provided for in the final Season of the original term of the Contract; then such Salary plus Unlikely Bonuses shall immediately be deemed amended to provide for the maximum amount allowed by the applicable subsection (c)(i), (c)(ii), or (c)(iii) set forth above as follows: (1) if there is a signing bonus allocated to the first Salary Cap Year covered by the extended term, the amount of such allocation shall be reduced first; (2) if the reduction in clause (1) is insufficient to reduce the Salary plus Unlikely Bonuses to the maximum amount allowed pursuant to the applicable subsection (c)(i), (c)(ii), or (c)(iii) above (including because there is no signing bonus allocated to the first Salary Cap Year covered by the extended term) and the Extension provides for Incentive Compensation, the amount of Likely Bonuses and Unlikely Bonuses in the first Salary Cap Year covered by the extended term shall be reduced next (on a pro-rata basis); and (3) if the reductions in clauses (1) and (2) are insufficient to reduce the Salary plus Unlikely Bonuses to the maximum amount allowed pursuant to the applicable subsection (c)(i), (c)(ii), or (c)(iii) above (including because there is no signing bonus allocated to the first Salary Cap Year covered by the extended term and/or the Extension does not provide for Incentive Compensation), the amount of Base Compensation provided for in the first Salary Cap Year covered by the extended term shall be reduced last. In the event that the amount of a signing bonus allocation is deemed amended pursuant to the foregoing, then the amount of any signing bonus allocation in respect of each subsequent Salary Cap Year covered by the extended term shall also immediately be 40 Article II deemed amended proportionately (e.g., in the event that the amount of a signing bonus allocation is reduced by 50% in respect of the first Salary Cap Year covered by the extended term, then the amount of any signing bonus allocation in respect of each subsequent Salary Cap Year covered by the extended term shall also be reduced by 50%; and in the event that the amount of a signing bonus allocation is reduced by 100% in respect of the first Salary Cap Year covered by the extended term, then the amount of any signing bonus allocation in respect of each subsequent Salary Cap Year covered by the extended term shall also be reduced by 100%). In the event that the amount of any Likely Bonuses, Unlikely Bonuses, and/or Base Compensation is deemed amended pursuant to the foregoing, then the amount of any Likely Bonuses, Unlikely Bonuses, and/or Base Compensation in respect of each subsequent Salary Cap Year covered by the extended term shall also immediately be deemed amended to the extent necessary to comply with the maximum allowable increases or decreases over the amended Likely Bonuses, Unlikely Bonuses, and/or Base Compensation in the first Salary Cap Year covered by the extended term in accordance with Article VII, Section 5(a). (d) A player and a Team may provide in a Rookie Scale Extension that the player’s Salary (in the first Season of the extended term) will equal “the Maximum Annual Salary applicable to such player in the first Season of the extended term” or: (i) in the case of a Rookie Scale Extension for a First Round Pick who at the time the Extension is executed has already met at least one of the Higher Max Criteria, the player and Team may instead provide in the Extension that the player’s Salary (in the first Season of the extended term) will equal “[_____]% of the Salary Cap in effect during the first Season of the extended term.” The percentage to be included where brackets are indicated in the foregoing language shall equal the percentage that is agreed upon by the Team and player, which shall in no event be less than twenty-five percent (25%) or greater than thirty percent (30%); or (ii) in the case of a Rookie Scale Extension for any other First Round Pick (i.e., a First Round Pick who at the time the Extension is executed had not yet met at least one of the Higher Max Criteria), the player and Team may instead Article II 41 provide in the Extension that the player’s Salary (in the first Season of the extended term) will equal “25% of the Salary Cap in effect during the first Season of the extended term, or, if the player meets at least one of the applicable Higher Max Criteria during the fourth Season of his Rookie Scale Contract, [ ]% of the Salary Cap in effect during the first Season of the extended term.” The percentage to be included where brackets are indicated in the foregoing language shall equal the percentage of the Salary Cap that is agreed upon by the Team and player, which shall in no event be less than twenty-five percent (25%) or greater than thirty percent (30%). (iii) As an alternative to (i) or (ii) above, the Team may instead provide in the Extension that the player’s Salary (in the first Season of the extended term) will equal alternative percentages of the Salary Cap (which shall in no event be less than twenty-five percent (25%) or greater than thirty percent (30%)) based upon how and whether the player satisfies the applicable Higher Max Criteria. Accordingly, for example, with respect to a Rookie Scale Extension in which the first Season of the extended term commences with the 2024-25 Season, the Team and player could agree that the player’s Salary (in the first Season of the extended term) would be 25% of the Salary Cap in effect during the first Season of the extended term, or the applicable percentage of the Salary Cap set forth below if, during the fourth Season of his Rookie Scale Contract, the player meets the Higher Max Criteria set forth opposite such percentage: Higher Max Criteria Percentage All-NBA Second Team 27% All-NBA First Team 28% NBA MVP 30% The player and Team may provide in a Rookie Scale Extension that the Salaries in any Seasons after the first Season of the extended term will be increased or decreased based on percentages specified by the parties that comply with Article VII, Section 5(a). In the case of a Rookie Scale Extension entered into pursuant to (ii) or (iii) above, the player and Team 42 Article II may instead provide that Salaries in any Seasons after the first Season of the extended term will be increased or decreased by a different percentage based on the percentage of the Salary Cap that the player receives in Salary in the first Season of the extended term. Any such Rookie Scale Extension shall be deemed amended on July 1 of the Salary Cap Year covering the first Season of the extended term to provide for specific Salaries for each Season of the extended term, based on the Maximum Annual Salary applicable to such player on such July 1. A Rookie Scale Extension entered into pursuant to this subsection may not include any Incentive Compensation. (e) A player and a Team may provide in a Designated Veteran Player Extension that the player’s Salary (in the first Season of the extended term) will equal “[_____]% of the Salary Cap in effect during the first Season of the extended term.” The percentage to be included where brackets are indicated in the foregoing language shall equal the percentage that is agreed upon by the Team and player, which percentage shall in no event be less than thirty percent (30%) or greater than thirty-five percent (35%). The player and Team may provide in a Designated Veteran Player Extension that the Salaries in any Seasons after the first Season of the extended term will be increased or decreased based on percentages specified by the parties that comply with Article VII, Section 5(a). Any such Designated Veteran Player Extension shall be deemed amended on July 1 of the Salary Cap Year covering the first Season of the extended term to provide for specific Salaries for each Season of the extended term, based on the Maximum Annual Salary applicable to such player on such July 1. A Designated Veteran Player Extension entered into pursuant to this subsection may not include any Incentive Compensation. (f) Notwithstanding any other provision of this Agreement, if a trade of a Uniform Player Contract would, by reason of a trade bonus contained in such Contract, cause the player’s Salary plus Unlikely Bonuses for the Salary Cap Year in which such trade occurs to exceed the following amounts: (i) for any player who has completed fewer than seven (7) Years of Service, the greater of (x) twenty-five percent (25%) of the Salary Cap in effect at the time the trade bonus is earned, or (y) one hundred five percent (105%) of the player’s Salary for the Season prior to the Season in which the trade bonus is earned, or in the case of a 5th Year Eligible Player who met at least one of the Higher Max Criteria and signed a Article II 43 Contract or Rookie Scale Extension (as applicable) that provided for up to thirty percent (30%) of the Salary Cap, [__]% of the Salary Cap in effect at the time the trade bonus is earned with the applicable percentage where brackets are indicated equal to the percentage of the Salary Cap paid to the player in the first year of his Contract or the first year of the extended term in the case of a Rookie Scale Extension; (ii) for any player who has completed at least seven (7) but fewer than ten (10) Years of Service, the greater of (x) thirty percent (30%) of the Salary Cap in effect at the time the trade bonus is earned, or (y) one hundred five percent (105%) of the player’s Salary for the Season prior to the Season in which the trade bonus is earned, or in the case of a Designated Veteran Player who signed a Designated Veteran Player Contract or a Designated Veteran Player Extension (as applicable) that provided for up to thirty-five percent (35%) of the Salary Cap, [__]% of the Salary Cap in effect at the time the trade bonus is earned with the applicable percentage where brackets are indicated equal to the percentage of the Salary Cap paid to the player in the first year of his Contract (or the first year of the extended term in the case of a Designated Veteran Player Extension); or (iii) for any player who has completed ten (10) or more Years of Service, the greater of (x) thirty-five percent (35%) of the Salary Cap in effect at the time the trade bonus is earned, or (y) one hundred five percent (105%) of the player’s Salary for the Season prior to the Season in which the trade bonus is earned; then such player’s trade bonus shall be deemed amended to the extent necessary to reduce the player’s Salary plus Unlikely Bonuses to the maximum amount allowed by the applicable subsection (f)(i), (f)(ii), or (f)(iii) set forth above. (g) Notwithstanding any other provision of this Agreement, any Contract or Rookie Scale Extension entered into between a 5th Year Eligible Player and a Team that provides for Salary plus Unlikely Bonuses in the first Season covered by the Contract or Rookie Scale Extension (as applicable) 44 Article II greater than twenty-five percent (25%) of the Salary Cap in effect during the first Season of the Contract or extended term (as applicable) in accordance with the rules set forth in this Section 7 must be for at least four (4) Seasons (excluding any Option Year) and, in the case of a Rookie Scale Extension, excluding the last Season covered by the player’s Rookie Scale Contract.

Minimum player salary

The minimum player salary, or simply "the minimum", operares on a scale.

The amount a player receives in a minimum salary contract differs based on his number of years of NBA experience. "Years" of experience is itself something of a misnomer - to gain a year of experience, a player need spend only one day of the regular season on a team's roster, and it does not even need to be on the active list. Nevertheless, the amount of "years" of service that a player has is the main determining factor in the value of their minimum salary. The other factor is how long they sign for.

The figures in the minimum salary scale were arrived at thus; baseline exact amounts were hard-written into the CBA in the 2023-24 season, to be used if the salary cap increase from 2022-23 to 2023-24 did not increase enough to surpass them. Then for each remaining season of the agreement, the scale amounts vary in line with the percentage change of the salary cap. So if the salary cap increases 110% from the previous season, so do each of the minimum salaries on the scale. This is the same methodology used on the rookie scale.

RealGM has the full details of the minimum salary scale, using the official NBA numbers/projections. Find the salary cap year the player signed in, find their years of experience at the start of that year, and that is - or was, if you're looking backwards - their minimum salary.

More details related to the minimum salary can be found under the Minimum Salary Exception, the primary vehicle under which players are signed for the minimum. (Indeed, "the minimum" is confusingly used in salary cap parlance to refer to both the exception and the amount. It is however both possible, and not all that rare, to sign players for the minimum salary not using the Minimum Salary Exception, due to its maximum length of only two years. This is the main reason why the Second Round Exception was brought into being.)

George Hill: (d) On July 1 of each Salary Cap Year, any Player Contract (other than a Two-Way Contract), whether entered into before or after the effective date of this Agreement, that provides for a Salary for the upcoming Season that is less than the applicable Minimum Player Salary based on the Minimum Annual Salary Scale applicable to the player’s Contract shall be deemed amended to provide for the applicable Minimum Player Salary based on such Minimum Annual Salary Scale.

In summary, the only times that an NBA player can earn less than the minimum salary are:

a) A prorated minimum salary, if signing for the remainder of the season.
b) A two-way contract
c) A ten-day contract.

- The more your team are over the luxury tax threshold, the more your team will pay.

- The more regularly your team is over the luxury tax threshold, the more your team will pay, too.

- Teams under the tax threshold not only avoid penalty, but get rebates, which do not change their salary cap picture but which do improve the cash position.

- In addition to the luxury tax - whose effectiveness as a payroll deterrent had dwindled in light of the Golden State Warriors' extravagant spending - the NBA has recently introduced the "apron" thresholds, which exist in addition to the tax, and which are designed to reduce excessive spending not just through extra payments but through reduced spending options. See the Aprons page for more.