Salary can be adjusted solely for the Receiving Team, called Incoming Trade Salary, for the Sending Team, called Outgoing Trade Salary, or for both.
What Isn’t Salary?
There are a few Tradeable Assets and certain Contract Types that count as $0 in Trade Salary:
Asset Types
When any of these assets are included in Trade, they don’t have to be calculated as Incoming or Outgoing Trade Salary:
- Draft Picks/Swaps;
- Draft Rights;
- Cash-in-Trade.
Contract Types
- Two-Way Contracts;
- Minimium Exception Contracts – Any Contract that fits into the Minimum Exception counts as $0 in Incoming Trade Salary only.
Teams often use this rule to their advantage, as the Sending Team can increase their Outgoing Trade Salary by including Minimum Exception Contracts in the Trade, while none of those Contracts count as Incoming Trade Salary for the Receiving Team.
Not that the Stacking Minimum Contracts rule limits this to an extent.
Summary of Adjustments
| Type | Incoming/Outgoing Trade Salary Adjustment |
|---|---|
| Team-Related Bonuses | Both. Adjust on a Team-by-Team basis. |
| Non-Guaranteed Salary | Outgoing Trade Salary |
| Sign-and-Trade Using Bird Rights | Outgoing Trade Salary |
| Minimum Exception | Incoming Trade Salary |
| Rookie Scale Extensions | Incoming Trade Salary |
| Trade Bonus | Incoming Trade Salary |
Incentive Compensation Adjustment
A Team Related Performance Bonus is determined Likely or Unlikely based on the Team’s prior performance. If the Player changes Teams, the Bonus could then shift from Likely to Unlikely, or vice versa. This has to be accounted for in Trade.
When a Player is Traded, apply the likeliness test for each individual Team.
If it is a Likely Bonus for the Receiving Team, then include it in Incoming Trade Salary, but if it’s an Unlikely Bonus for the Sending Team, then exclude it for Outgoing Trade Salary (and vice versa).
In 2025, the Suns traded Kevin Durant to the Rockets for Dillon Brooks and Jalen Green. Durant’s Salary was $54,708,609. Green’s Salary was $33,333,333.
Brooks, on the other hand, had a $1 million Bonus related to reaching the First Round of the Playoffs. The Rockets achieved this the prior year. Therefore, his Salary for the Rockets was $22,124,110.
The Suns did not make the First Round the year prior, so the Bonus would not be triggered, and his Salary for the Suns is reduced to $21,124,110. This slight reduction is crucial, because the Suns were a Second Apron Team restricted from acquiring more Trade Salary than sending out. See the calculations below.
| Durant – $54,708,609 | ||
|---|---|---|
| Rockets Outgoing | Suns Incoming | |
| Green | $33,333,333 | $33,333,333 |
| Brooks | $22,124,110 | $21,124,110 |
| Total | $55,457,443 | $54,457,443 |
Outgoing Trade Salary Adjustments
The below circumstances adjust the Player’s Outgoing Trade Salary only:
- Non-Guaranteed Salary;
- Sign-and-Trade using Bird Rights.
Non-Guaranteed Salary Reduced
Calculating the Reduction
When calculating Outgoing Trade Salary you have to reduce the amount of non-guaranteed Salary depending on when the Trade is made during the Salary Cap Year.
| Stage of Season | Treatment of Salary |
|---|---|
| 7/1 until the Regular Season | Only include guaranteed Salary. |
| Regular Season through 1/7 | Prorate the earned Salary (take the full Salary and multiply by the remaining percentage of the Season remaining). |
| 1/8 to end of Regular Season | Treat all Salary as fully protected (i.e. no reduction). |
| After Regular Season through 6/30 | Take the lesser of (i) the Player’s Salary for the current Salary Cap Year and (ii) the Player’s guaranteed Salary of the following Salary Cap Year. |
Amending the Guarantee
Teams have the ability to amend Compensation Protection (i.e. guaranteed Salary) throughout the life the Contract. Teams have used this often to execute trades under the new Apron limitations.
In the 2024 offseason, Alex Caruso was traded from the Bulls to the Thunder. In June his Salary for the current Salary Cap Year was $9.4. His Salary for 2024-2025 was $9.8, but it was only guaranteed for $3 million. This meant his Outgoing Trade Salary was only $3 million, unless amended. The Bulls amended his contract to be fully guaranteed. Therefore his $9.4 million Salary for the prior Salary Cap Year applied (because it was the lesser of the two) allowing them to trade his $9.4 million Contract in exchange for Giddey’s $6.5 million Contract.
Sign-and-Trade of Bird Rights
The Player’s Outgoing Trade Salary is adjusted in a Sign-and-Trade if:
- The Player is traded pursuant to a Sign-and-Trade;
- The Sending Team signs him using Full Bird or Early Bird Rights; and
- The first Season’s Salary plus Unlikely Bonuses is greater than what could be signed using Non-Bird Rights
Adjustment Made to Outgoing Trade Salary
If the rule applies, then his Outgoing Trade Salary is the greater of:
- The Salary for the last Season of the Player’s prior Contract, or
- 50% of the Salary for the first Season of the new Contract.
In July 2023, Max Strus signed a 4-Year, $62.3 million contract as part of a Sign-and-Trade with the Heat and acquired by the Cavs. His starting Salary was $14,487,684.
Because he signed with the Heat using Full Bird Rights for more than he could have signed for Non-Bird Rights, he was subject to the rule. His Prior Salary was only $1,815,677. Therefore, 50% of his starting Salary ($7,243,842) was used as his Outgoing Trade Salary for Miami.
No Minimum Salary Subsidy for Prior Contract
If the prior Contract was for Minimum Salary, then don’t subsidize it in the calculation (i.e. don’t apply just the 2 YOS minimum, but apply the Minimum Salary actually paid to the Player according to his YOS accrued).
Incoming Trade Salary Adjustments
Minimum Exception
As discussed briefly above, a Contract falling within the scope of the Minimum Exception can be acquired via Trade and will count as $0 Incoming Trade Salary. The Contract will count as Outgoing Trade Salary for the Sending Team.
Note this is why the CBA limits the “stacking” of Minimum Contracts, when Teams seek to add up several Minimum Contracts to reach the required Outgoing Trade Salary, knowing it counts as $0 in Incoming Trade Salary for the Receiving Team.
Rookie Scale Extensions (the “Poison Pill” Provision)
General Rule
The CBA applies a Poison Pill Provision for Players who have signed a Rookie Scale Extension based on the understanding the Player’s value is much higher than his cost-controlled Salary in the 4th Season of his Rookie Scale Contract.
The Poison Pill is triggered if:
- A Rookie Scale Extension is signed; and
- The Player is Traded before the Extension begins.
Incoming Trade Salary
When the Poison Pill is triggered, his Incoming Trade Salary is his Average Annual Salary of his entire Contract, including Option Year.
If Based on Percentage
If the Rookie Extension is based on a Percentage (e.g. 25% of the Salary Cap), then assume the Salary Cap increases 104.5% for the first year of the extended term, and assume he does not reach any Higher Max Criteria benchmarks.
If such calculation exceeds the Player’s Maximum Salary, reduce it to his Maximum Salary.
Trade Bonuses
Despite the Sending Team paying the Trade Bonus, the Receiving Team accounts the Trade Bonus as Incoming Trade Salary (it is also added as Team Salary for the Receiving Team).
When determining Incoming Trade Salary for Trade Math purposes, you use the portion of the Trade Bonus that is allocated to the current Salary Cap Year of the Trade.
Visit the Trade Bonus page for a detailed explanation for calculating the Trade Bonus both in the current Salary Cap Year (relevant for Trade Salary) and over the length of the Contract.
Trade Bonus Calculator
Use the Trade Bonus Calculator to find the Trade Bonus Amount for all current Player’s currently with Trade Bonuses. You can adjust the trade date to see how the amount changes, including yearly allocation.