Table of Contents

    Thresholds

    The five thresholds–Salary Cap, Minimum Team Salary, Luxury Tax and the First and Second Aprons–are the backbone of roster-building in today’s NBA. Each threshold is accompanied by its own rules when exceeding the threshold (or failing to exceed the threshold for Minimum Team Salary purposes). The Guide breaks down the rules for each Threshold on individual pages, linked below.

    The Five Thresholds

    Below are the five thresholds in the CBA that carry restrictions and/or penalties, serving to regulate spending and create an even playing field for all Teams:

    1. Minimum Team Salary;
    2. Salary Cap;
    3. Luxury Tax;
    4. First Apron;
    5. Second Apron.

    Because the Salary Cap is a “soft” Salary Cap (i.e. there are Exceptions permitting Teams to exceed the Salary Cap), the CBA implemented the Luxury Tax to impose financial penalties and the First and Second Aprons to impose roster-building limitations to deter excessive spending.

    The Minimum Team Salary threshold, on the other hand, was implemented to ensure Teams were spending a minimum amount on its roster on an annual basis.

    Setting the Thresholds

    Threshold Limitation
    Minimum Team Salary $139,191,000
    Salary Cap $154,657,000
    Luxury Tax $187,895,000
    First Apron $195,945,000
    Second Apron $207,824,000

    The threshold amounts are determined first by setting the Salary Cap using BRI (details in the Finances page).

    The other Thresholds are calculated as follows:

    Threshold Calculation
    Minimum Team Salary 90% of Salary Cap
    Luxury Tax 121.5% of Salary Cap
    First and Second Aprons* [2023-24 Apron Amount] x Current Year Salary Cap 2023-24 Salary Cap
    *
    2023-24 Salary Cap: $136,021,000
    2023-24 First Apron: $172,346,000
    2023-24 Second Apron: $182,794,000

    Calculating for Thresholds

    Each threshold uses different calculations when determining if a Team is above or below the applicable threshold.

    The Salary Cap uses Team Salary.

    The Aprons then make adjustments to Team Salary (e.g. removing Cap Holds and adding Unlikely Bonuses), which is called Apron Team Salary.

    Minimum Team Salary and the Luxury Tax use Salaries that are calculated for purposes of the audit, called Total Salaries, which in simple terms, adjusts for money actually paid by the Teams (e.g. Performance Bonuses earned count, while those unearned do not).