Table of Contents

    Team Salary

    Generally

    Team Salary is the calculation made to determine how much a Team falls above or below the Salary Cap threshold.

    Team Salary is not just the Salaries of a Team’s Players, but includes additional items–primarily Cap Holds–while excluding others.

    ✍️ Team Salary vs. Apron Salary
    Team Salary is different than Apron Salary. However, to calculate Apron Salary you must first calculate Team Salary and then make additional adjustments to find Apron Salary.

    Team Salary Summary

    When calculating Team Salary, you account for the following. Click the link to jump to the description.

    Include:

    1. Player Salaries;
    2. Waived Salary;
    3. Retired Players Under Contract;
    4. Transactions with Retired Players;
    5. Settlements/Grievances;
    6. Pending Contracts;
    7. Outstanding Offer Sheets;
    8. Cap Holds;
    9. Assigned Contracts;
    10. Minimum Team Salary Adjustment.

    Exclude:

    1. Renounced Cap Holds;
    2. Long-Term Injury Exclusion;
    3. Excludes Contract Types.

    Players on Roster

    Include all Salaries of the Players currently on the Team.

    Waived Players

    Guaranteed Salaries

    If a Player is waived, but has Protected Compensation, then the Dead Salary will remain on the Team’s books after waiving the Player. Visit the Waiver page to review how the Dead Salary is calculated, and how a Team can Stretch the Dead Salary over a longer period of time.

    Non-Guaranteed Salaries

    The Universal Cutdown Date

    Any Contract that is terminated for “lack of skill” from January 10th to the end of the Season is entitled to his full Base Compensation for the Season.

    Therefore, if a Team seeks to terminate the Contract prior to the Salary being fully guaranteed for the Season, the Team must allow the Player to clear waivers prior to January 10th (i.e. he must be cut on January 7th).

    Waiver Prior to the Universal Cutdown Date

    If a Player’s Salary is non-guaranteed, then the only Salary that remains on the Team’s books after waiving the Player is his Per-Day Cap Hit starting as of the start of the Regular Season.

    To calculate Per-Day Cap Hit, you take the Player’s Salary and divide by 174 (the number of Regular Season Days).

    To calculate Salary earned, you multiply his Per-Day Cap Hit by the number of days on the roster, after release (not as of the waiver claim, which is two days earlier than release).

    🏀 Fernando Waived Prior to Cutdown Date
    On the cutdown date during the 2024-25 Season, the Raptors waived Bruno Fernando. Fernando was earning a non-guaranteed Salary of $2,425,403.

    $2,425,403 ÷ 174 = $13,939.10 Per-Day Cap Hit.

    $13,939.10 x 80 (days on Roster) = $1,115,128 in Dead Salary.

    Note that if a Player’s Salary is subsidized to 2 YOS Minimum Salary, you remove the subsidy should the Player get waived during the Season.

    🏀 Dozier’s Unsubsidized Salary Subject to Cap Hit
    In 2024-25, Minnesota signed P.J. Dozier to a 1-year Minimum Contract. With 7 YOS, his Compensation was $2,613,120, but his Salary was subsidized to 2 YOS Minimum Salary of $2,087,519.

    On December 28, 2024, Minnesota waived Dozier. Therefore, his Per-Day Cap Hit was calculated based on his unsubsidized Compensation: $2,613,120 ÷ 174 = $15,017.93.

    $15,017.93 x 70 (days elapsed) = $1,051,255 in Dead Salary.

    Note Dozier had $1 million guaranteed. Had Dozier been waived earlier in the season where the Per-Day Cap Hit calculation was less then $1 million, then the $1 million would remain as Dead Salary.

    If a Team does not want to incur a Per-Day Cap Hit, the Player must be waived by 5:00 P.M. two days prior to the first day of the Regular Season.

    Pending Contracts

    Salaries that are anticipated to be included in Team Salary based on any agreement that is required to be disclosed to the NBA.

    Outstanding Offer Sheets

    The outstanding Salaries called for under all outstanding Offer Sheets through the Restricted Free Agency process.

    Cap Holds

    Purpose

    Cap Holds are a way to artificially add Team Salary as a placeholder for future signings.

    It is meant to limit Teams from using all of their cap space to sign new UFA‘s, and then going back and resigning their own Players over the Salary Cap using Bird Rights.

    ✍️ A Hypothetical to Understand the Purpose of Cap Holds
    Let’s say, hypothetically, the Boston Celtics are entering this offseason with Jayson Tatum as a free agent, and the Celtics have $58 million in cap space. This is enough to sign him to his maximum. Without Cap Holds, the Celtics could use the $58 million to sign other Free Agents using cap space, and stay under the Salary Cap threshold. They could then resign Tatum over the Salary Cap using their Bird Rights. The cap holds apply to remove that cap space with the understanding the Celtics are likely going to resign Tatum.

    There are four different types of Cap Holds:

    1. Free Agent Cap Holds;
    2. First Round Picks;
    3. Open Roster Spots;
    4. Salary Cap Exceptions.

    Free Agent Cap Holds

    A Cap Hold is added to Team Salary for any Player finishing the Season on the Team’s Roster.

    Free Agent Cap Holds are based upon the prior Contract Type and Prior Salary.

    Prior Salary – Include last Season’s Regular Salary, Signing Bonus allocation and his Incentive Compensation that was actually earned when the Player finished the Season.

    Free Agent Cap Hold Formulas

    Below are the formulas depending on Contract Type. However, a Cap Hold will never be above or below the Player’s applicable Maximum or Minimum Salary. If the formula exceeds Maximum or Minimum Salary, then adjust the Cap Hold to the limit.

    Prior Contract Elements Percent Prior Salary
    Rookie Scale Contract 1. Coming off 4th year;
    and
    2. Prior Salary Below EAPS    		 300%
    Rookie Scale Contract 1. Coming off 4th year;
    and
    2. Prior Salary Above EAPS    		 250%
    Rookie Scale Contract Coming off 2nd or 3rd Year Rookie Scale Amount Only
    Restricted Free Agent N/A Greater of:
    1. Applicable UFA Cap Hold;
    2. Qualifying Offer Amount;
    3. ROFR (matching) Amount
    Minimum Salary Contract N/A New Minimum Salary Amount (never above 2-Year Veteran Minimum)
    Two-Way Contract N/A Minimum Salary for Player with 0 Years of Service
    UFA
    (other than above)    		 1. Full Bird; and
    2. Prior Salary Below EAPS    		 190%
    UFA
    (other than above)    		 1. Full Bird; and
    2. Prior Above EAPS    		 150%
    UFA
    (other than above)    		 Early Bird 130%
    UFA
    (other than above)    		 Non-Bird 120%

    First Round Pick Cap Holds

    A Cap Hold is added to Team Salary for any Player drafted in the First Round by the Team.

    Amount

    Apply 120% of the Player’s Rookie Scale Amount.

    Date Added

    The Cap Hold takes effect immediately upon selection in the Draft.

    Date Removed

    The Cap Hold Remains in effect until one of the following occurs:

    1. Signs his NBA Contract;
    2. Team loses or assigns his Draft Rights;
    3. Signs a Non-NBA Contract:
      • If the Player signs a Non-NBA Contract, the Cap Hold is released on the later of (i) the date he signs the Non-NBA Contract or (ii) the first day of the Regular Season;
      • The Cap Hold is reinstated on the following July 1st or when the Player is released from the Non-NBA Contract (unless renounced). You reapply the same rule above if he signs another Non-NBA Contract after July 1st;
    4. Written Letter – The Team may remove the Cap Hold prior to the start of the Regular Season by issuing a written statement to the League that the Team will not sign the player during the Salary Cap Year accompanied by a written statement from the Player renouncing his right to accept any Required Tender made by him. The Cap Hold is reinstated on the following July 1st.

    Open Roster Spot Cap Hold

    A Cap Hold is added to Team Salary for open spots on the Team Roster to account for the requirement that the Team must sign a Player to fill the roster spot.

    Counting Roster Spots

    The following are counted as roster spots for this rule:

    1. Players under Standard Contracts;
    2. Players counting toward a Free Agent Cap Hold;
    3. Players counting toward a Draft Pick Cap Hold;
    4. Players whom Offer Sheets are given.

    Calculating Cap Hold

    Once you calculate roster spots, you calculate the potential Cap Hold accordingly:

    Calculating Roster Spot Cap Hold

    Step 1 – Take total roster spots and subtract it from 12;

    Step 2 – If there is a negative number, there is no Open Roster Spot Cap Hold;

    Step 3 – If there is a positive number, you multiply that number by the applicable Minimum Salary for a Player with 0 Years of Service to determine the Team’s total Open Roster Spot Cap Hold.

    Salary Cap Exceptions

    Purpose

    This Cap Hold is meant to avoid a situation where a Team can double dip and act as a Cap Space Team, and then act as a Team with a particular Salary Cap Exception.

    🏀 Hypothetical Explaining the Purpose
    Team A has $8 million in cap space below the Salary Cap before considering a Salary Cap Exception Cap Hold. If this rule didn’t apply, the Team could sign one player to an $8 million contract using Cap Space, and then use the Non-Taxpayer Midlevel Exception to sign another player to a $12 million contract. This rule eliminates this cap space manipulation. Since Team A’s cap space is less then the NTMLE, a Cap Hold is added for the NTMLE amount and the Team is considered over the Salary Cap.

    When Applied

    This Cap Hold is applied in the following circumstance:

    1. One or more Salary Cap Exceptions are available to the Team; and
    2. Team Salary is below the Salary Cap by less than the Exceptions available.
    3. then the amount of the Exception is included in the Team’s Team Salary until the Exception is actually used or until the Team is no longer entitled to the Exception.

    The amount of the Exception is included in the Team’s Team Salary until the Exception is actually used or until the Team is no longer entitled to the Exception.

    🏀 Hypothetical When Cap Holds Apply
    Team A is $18 million under the Salary Cap before Salary Cap Exception Cap Holds apply. Team A has the $14.1 million NTMLE and the $5.1 million Bi-Annual Exception available. Therefore, the Team is $1.2 million over the Salary Cap. If they want to sign one Player to an $18 million Contract, the Team can renounce their Exceptions and sign the Player using Cap Space.

    Signings/DPE

    When an Exception is used to sign a Player, the Player’s Salary takes the place of the Cap Hold (any unused portion will remain if the rule above still applies).

    Similarly, when a DPE is used to sign or acquire a player, the Player’s acquired Salary takes the place of the DPE.

    Assigned Contracts

    The assigned Team shall include the entire Salary for then-current and future Salary Cap Years for any assigned Contract (via Trade or Waiver claim).

    Minimum Team Salary Adjustment

    If a Team falls below the Minimum Team Salary threshold, Team Salary will be adjusted throughout the Salary Cap year to equal the Minimum Team Salary threshold, starting at the beginning of the Regular Season.

    Visit the Minimum Team Salary page for details.

    Retired Players Under Contract

    If a Player retires and a Team continues to pay the Player, allocate the Player’s unearned Protected Compensation for then-current and remaining Salary Cap Years pro rata over then-current and remaining years on a pro rata basis, irrespective of payment schedule.

    Transactions With Retired Players

    Any value or consideration determined to be considered Team Salary due to a finding that the transaction circumvented the CBA, per the process discussed in detail in the Circumvention page.

    Grievances

    When a Grievance is filed, Team Salary will be affected during the pendency of the proceeding and may be adjusted based upon how the Grievance is resolved.

    Grievance Pending

    When a Grievance is initiated seeking payment of Compensation for current or future Seasons that the Team asserts is not owed, 50% of the amount disputed is allocated as Salary to the Salary Cap Year it related to.

    When a Grievance is initiated seeking payment of Compensation for prior Seasons, there is no adjustment until resolution.

    Grievance Resolved – Single Year

    When the Grievance is resolved the 50% that was applied to Team Salary during the pendency of the proceeding is adjusted up or down depending on the award.

    The adjustment is first made to the applicable Salary Cap Year the Grievance is related to. However, if the Salary Cap Year has passed, then the adjustment is made to the Year in which the Grievance is resolved.

    Tax Implications

    The Team will be subject to additional tax obligations if the tax payment made is less than the amount it should have paid after the Grievance is resolved.

    Vice versa, the Team will be entitled to a tax refund if the Team paid more in tax than it should have after the Grievance is resolved.

    Grievance Resolved – Multiple Years

    When the Grievance is resolved and concerns more than one Season, the aggregate amounts payable shall be allocated to each Season in proportion to the amount of Compensation that was in dispute for such Season.

    • Exception – If the Grievance Arbitrator allocates amounts payable to the Player in specific Seasons in the Grievance Award.

    Team Salary – What’s Excluded

    The following is excluded from Team Salary:

    1. Renounced Cap Holds;
    2. Long-Term Injury Exclusion;
    3. Excluded Contract Types:

    Renouncing Cap Holds

    Generally

    A Team can renounce Cap Holds listed above to remove them from Team Salary.

    For Free Agent Cap Holds, the Team provides a written statement to the League renouncing the Team’s right to resign the Player effective no earlier than July 1st following the last Season covered by the Contract.

    Restricted Free Agent

    A Team cannot renounce a Player who is a Restricted Free Agent.

    A Team must relinquish ROFR rights to the Player, turning the Player into a UFA, which automatically renounces any Free Agent Cap Hold for the Prior Team.

    Effect on Bird Rights

    If a Team renounces a Veteran Free Agent Cap Hold, the Team will lose any Bird Rights to the Player. The Team will be just like any other Team in free agency at that time and need to use cap space or a different Exception to sign the Player.

    ✍️ Re-signing After Renouncing Does not Reset “Bird Clock”
    Even if Bird Rights are renounced, the Team can still re-sign the Player and continue to accrue ongoing Bird Rights to the Player.

    Renouncing Down

    A Team can “renounce down” from Early Bird Rights to Non-Bird Rights to avoid the required 2-Year minimum length requirement.

    Offer Sheets and “Unrenouncing”

    A Team won’t lose Bird Rights or Draft Rights (if First Round Pick Cap Hold and Draft Rights are renounced) in the following circumstance:

    1. Team renounced the Cap Hold to make enough room to sign a different Player to an Offer Sheet;
    2. The Prior Team matched the Offer Sheet and therefore does not sign with the Team;
    3. The Team unrenounces the Cap Hold within two days of the match (or the physical, if applicable); and
    4. The renounced Cap Hold is added back to Team Salary:
      • It can’t be added back to Team Salary (and thus the Team still loses Bird rights) if:
        • Team was at or below the Salary Cap when renouncing, and unrenouncing puts them above the Salary Cap;
        • Team was above the Salary Cap when renouncing, and unrenouncing would exceed the Team’s Team Salary at the time of renouncing.

    Long-Term Injury Exclusion

    Requirements

    Below is the process for the Long-Term Injury Exclusion:

    1. Must waive the Player;
    2. Apply for cap relief after “waiting period”, which is:
      • If 10+ games played in the last Season, apply 1-year anniversary of final game;
      • If less than 10 games played in the last Season, then apply 60 days after the player’s last game, or 1-year anniversary of the final game in the previous season;
    3. Must be the same Team Player was on when he was injured;
    4. Can’t apply if already applied for DPE;
    5. Certified by a physician that the injury is career-ending;
    6. If the League grants the relief, the Salary is removed from Team Salary immediately, and the Team is prohibited from resigning the Player.

    Playing Again

    If the Player plays 25 games again after the League granted the relief above, the Team Salary for the current Season is included in Team Salary for the original Team, unless ruling was based on “materially elevated risk.” The Team may reapply to have the Salary excluded using the same process.

    Contract Types Excluded from Team Salary

    The following Contract types are excluded from Team Salary:

    1. Summer Contracts;
    2. Two-Way Contracts;
    3. Exhibit 10 Bonuses;
    4. Second Round Pick Exceptions (only until 7/30).