Amount

Trade Bonuses are limited to 15% of the Player’s Base Compensation.

The Trade Bonus can be a percentage of Base Compensation or a fixed amount (not to exceed the maximum 15% Base Compensation).

Contracts can also condition the amount as the lesser of the two (e.g. the lesser of 5% Base Compensation to be earned or $5 million).

Trade Bonus Paid Once

A Trade Bonus is only paid once. If the Contract is traded a second time, there is no more Trade Bonus to be paid.

If the Trade Bonus is part of a Sign-and-Trade or Extend-and-Trade, then the Trade Bonus isn’t triggered when the Contract is first signed and the Player is immediately traded. Instead, the Trade Bonus would be triggered on a subsequent trade.

While the Trade Bonus is added to the Receiving Team’s Team Salary (calculated below), the Sending Team pays the Trade Bonus.

Amending as Part of Trade

The Player can agree to reduce all or a portion of the Trade Bonus as part of a Trade (this is different than amending the Trade Bonus before a Trade occurs, discussed below).

This occurs when a Player wishes to be traded to a more desirable Team and the waiver of the Trade Bonus allows the Trade Salary to work for the execution of the Trade.

The Player’s Contract cannot be renegotiated for six months from the date of the Trade if he reduces his Trade Bonus.

Amending Prior to Trade

Prior to a Trade, a Trade Bonus can only be adjusted, removed or added as part of an Extension (and in some circumstances, an Extend-and-Trade).

Different rules apply if (i) adjusting the amount of the Trade Bonus, (ii) adding a new Trade Bonus or (iii) removing an existing Trade Bonus.

Adjusting the Amount of Trade Bonus

A Trade Bonus amount can be adjusted for the extended term of the Contract when an Extension is signed.

As part of an Extend-and-Trade, the Trade Bonus can only be reduced.

Adding a Trade Bonus

A Trade Bonus can be added to a Contract that did not have one when an Extension is signed (payable after the signing of the Extension) or Extend-and-Trade (payable in trade subsequent to the initial trade).

The Trade Bonus is due if the trade occurs any time after the signing of the Extension, or any trade subsequent to the initial trade if it was part of an Extend-and-Trade.

Removing a Trade Bonus

A Trade Bonus can be removed from the extended term of the Contract when signing an Extension or Extend-and-Trade.

If traded during the original term, the Trade Bonus is due, and is calculated based on remaining Base Compensation owed in original term of Contract (the Player can still waive the Trade Bonus in connection with the Trade as discussed above).

If traded during the extended term, then no Trade Bonus is due.

Calculating Trade Bonus

Trade Bonus Allocation

Allocating the Trade Bonus as Salary is similar to a Signing Bonus because it is defined as a Signing Bonus in the CBA.

Therefore, a Trade Bonus is allocated across the guaranteed Seasons remaining in the contract.

However, a Trade Bonus is different than a Signing Bonus because (i) the amount is based upon remaining Base Compensation owed, and (ii) a Trade Bonus will inevitably be triggered partway through the Contract. As a result, the Trade Bonus amount adjusts throughout the life of the Contract.

Below is a Roadmap for calculating Trade Bonus amounts, followed by the step-by-step instructions.

Trade Bonus Math – The Roadmap

First the Total Trade Bonus Amount must be found. Second, you calculate how it is calculated over the remaining Seasons in the Contract.

Step 1 – Find Total Trade Bonus Amount

• If Fixed Amount, use that;
• If Percentage-Based:
  • First, find Total Base Compensation Owed;
    • To find Total Base Compensation Owed, you must find (i) Current Season Base Compensation Owed and (ii) Future Seasons Base Compensation Owed;
      • To find Current Season Base Compensation Owed, you must find Percent Regular Season Remaining;
    • Add Current Season Base Compensation Owed to Future Season Base Compensation Owed to find Total Base Compensation Owed;
    • Multiply the percentage by the Total Base Compensation Owed to find the Total Trade Bonus Amount.

Step 2 – Allocate Total Trade Bonus Amount

• Allocate the Total Trade Bonus Amount as Salary the same way you allocate a Signing Bonus.

Step 3 – Adjust Total Trade Bonus Amount and Allocation if it exceeds Maximum Salary

• Adjust the Salary allocation based on applicable Maximum Salary, which in turn will adjust the Total Trade Bonus Amount.

Step 1 – Total Trade Bonus Amount

Before you can allocate the Trade Bonus as Salary per Season, you must first determine the total amount of the Trade Bonus–i.e. the “Total Trade Bonus Amount.”

If it is a Fixed Trade Bonus Amount, then you already know the Total Trade Bonus Amount. You can move on to “Step 2 – Allocate Total Trade Bonus Amount” below.

If it is a Percentage-Based Trade Bonus, you need to follow the below steps to find the Total Trade Bonus Amount:

Total Base Compensation Owed (TBCO)

When based on a percentage, you must calculate the total guaranteed Base Compensation remaining to be owed to the Player as of the date of the trade, excluding Option years (the Total Base Compensation Owed).

Once the Total Base Compensation Owed is found, you take the percentage from that to find the Total Trade Bonus Amount.

Because you find the Total Base Compensation Owed as of the date of the trade, the Current Season Base Compensation Owed changes on a daily basis throughout the Regular Season.

Therefore, you must first determine the Current Season Base Compensation Owed as of the date of the trade, using the steps below:

Current Season Base Compensation Owed

The Current Season Base Compensation Owed can be tricky, as it adjusts on a daily basis once the Regular Season begins.

Therefore, to determine the Current Season Base Compensation owed, you must first find the Percent Regular Season Remaining:

Regular Season Percentage – Before or After the Regular Season:

1. If the Trade occurs before the start of the Regular Season, then 100% of the Regular Season remains. Factor the entire guaranteed Base Compensation for the current Season as part of the calculation.
2. If the Trade occurs after the Regular Season concludes, but before the new Salary Cap Year. Then 0% of the Regular Season remains. Exclude the current Season’s Salary from the Trade Bonus Calculation, because it is not “remaining to be owed.”

Regular Season Percentage – During the Regular Season:

If the Trade occurs during the Regular Season:

1. Find the number of days that have elapsed from the start of the Regular Season (174 in 2025-26 ) to the date of the Trade. These are your Days Elapsed.
2. Subtract Days Elapsed from Regular Season Days to find Days Remaining.
3. Divide your Days Remaining by the total number of Regular Season Days in the Salary Cap Year. This is your Percentage Elapsed.
4. Multiply the Player’s guaranteed Base Compensation by this Percentage Elapsed to find the remaining amount owed for the current season to find the Current Season Based Compensation Owed.

Total Base Compensation Owed – All Seasons

Next, add the Current Season Base Compensation Owed to the all guaranteed Base Compensation remaining over future Seasons, excluding Option Years.

This is the Player’s Total Base Compensation Owed (TBCO).

Multiply TBCO by the Percentage

Multiply the Total Base Compensation Owed by the applicable percentage to find the Player’s Total Trade Bonus Amount.

If the Player had a “lesser of” condition between the percentage and a fixed amount, now you can determine whether the fixed amount is less than the percentage. Apply the proper Total Trade Bonus Amount.

This amount may be adjusted down if the yearly allocation exceeds the Maximum Salary. But we don’t know that until after the allocation is completed, and then we adjust. So let’s move on to our next step.

Step 2 – Allocate Total Trade Bonus Amount

Allocate Using Pro Rata Math

Once the Total Trade Bonus is found using the steps above, you allocate the Total Trade Bonus over the total number of guaranteed Seasons remaining on the Contract. Use the same calculation as the “Signing Bonus Math” in the Salary page.

Note that if the trade occurs after the Regular Season, but before July 1st (i.e. the new Salary Cap Year), you allocate Salary to the current Season even though there is $0 remaining to be owed for the current Season.

Step 3 – Maximum Salary Adjustment

One final adjustment required is determining if the Trade Bonus in the current season exceeds the Player’s applicable Maximum Salary. If so, the Trade Bonus for such season must be reduced to the Player’s Maximum Salary.

Note that Maximum Salary would include a Rookie Scale Contract exceeding 120% Salary/Unlikely Bonus.

If the Trade Bonus is deducted for the current Season’s Salary, then the Trade Bonus allocations for future seasons must also be reduced by the same percentage.

Step 1 – Does Current Season Salary exceed Maximum Salary?

1. Once the Yearly Allocation is calculated above, you find the Trade Bonus Amount for the current Season (Current Season Trade Bonus) and add it to the Player’s Salary plus Unlikely Bonuses.
2. If the Player’s Salary + Unlikely Bonuses + Current Season Trade Bonus does not exceed the Player’s applicable Maximum Salary, then no further adjustment is required.
3. If the Player’s Salary + Unlikely Bonuses + Current Season Trade Bonus does exceed his Maximum Salary, then make the following adjustment:

Step 2 – Adjust down to Maximum Salary if needed.

1. Find the Excess: Subtract the applicable Maximum Salary from the Player’s Salary + Unlikely Bonuses + Current Season Trade Bonus to find the Excess Trade Bonus Amount.
2. Find the Allowable Amount: Subtract the Excess Trade Bonus Amount from the Current Season Trade Bonus to find the Allowable Current Season Trade Bonus Amount. This is the amount permitted to be added without exceeding the Player’s Maximum Salary.
3. Find the Percentage Reduction: Take the new Current Season Trade Bonus and divide by the Prior Current Season Trade Bonus to find the Percentage Reduction.
4. Apply Percentage Reduction to Future Allocations: Multiply all future seasons allocated Trade Bonus Amounts by the Percentage Reduction to reduce all future seasons in proportion to the Current Season Trade Bonus.

Trade Bonus and Trade Salary

The Current Season Trade Bonus Amount will count as Incoming Trade Salary for the Receiving Team in a Trade, but not as Outgoing Trade Salary for the Sending Team.