How NBA money works

The salary cap is $165.0M. A team under it can sign free agents outright with the room it has left. Over it, a team can still re-sign its own players and use exceptions, so going over is normal. The luxury tax line is $200.4M; a team above it when the season ends pays a tax on every dollar over, and the rate climbs the further over it goes.

The first apron ($209.0M) and second apron ($221.7M) sit above the tax. Each one takes tools away: smaller exceptions, tighter trade rules, and above the second apron, a first-round pick seven years out can be frozen so it can't be traded. At the bottom, every team has to spend at least $148.5M.

The cap was $58.0M in 2010-11 and is $165.0M in 2026-27, about 2.8 times bigger. A $40.0M salary was 68.9% of the cap then and is 24.2% now. That's why we compare salaries and value as shares of the cap, and why a flat contract gets cheaper for the team in every year it runs.

A contract is a row of yearly salaries. Most years are guaranteed: the player is paid even if he's waived. Some carry an option. On a player option the player decides whether to play the year or become a free agent. On a team option the team decides whether to keep him. A year that isn't fully guaranteed can be avoided, in full or in part, by waiving him before a set date. These three real contracts each show one feature.

To say whether a contract is good, we need a price for what a player gives. We start from replacement level: how well players paid close to the minimum actually play. That kind of player costs the league minimum, $1.3M in 2026-27. Each win above replacement is priced at the league average over the last six seasons: all the salary teams paid above the minimum, divided by all the wins above replacement they got for it. That comes to 9.85% of the cap, or $16.2M a win this season.

Wins come from WAR1, adjusted down to replacement level. A player at or below replacement is worth the minimum, never less. Move the sliders to see how the two pieces add up.

Contract surplus runs the worth math for every season left on a contract and subtracts the salary. Future seasons need a projection of the player's wins, so we weight his last three DRBL seasons (the latest counts most), pull small samples toward average, apply an aging curve, and estimate his minutes. Each year gets an 80% range, and in back-tests about 80% of real outcomes landed inside it.

Salary played off applies the worth math as a season happens. Each night it adds up the wins a player has produced so far, prices them, and divides by his salary for the year. The dotted line is how much of the salary has been paid out by that date. A player above it is ahead of his contract; a player at 100% has covered the whole year. Here are four 2025-26 players chosen to show the range.

Picks are the other currency in team building. Every team starts with one first-rounder a year, then trades them away or collects more. 36 of the firsts on file now belong to a team other than the one that made them. BKN holds the most, with 12.

• Payrolls are the salaries listed for each player. They aren't official cap sheets: cap holds, dead money from stretched contracts, and incentive details aren't included.
• Worth and surplus are estimates with ranges. The middle number is our best guess, and the range is the honest part.
• Contracts we can't value, such as a player with too little DRBL history, are left out of totals. They never count as zero.
• A salary fitting under a line or into an exception isn't a ruling that a trade or signing is legal. See salary fit vs trade legality.
• Worth prices on-court play. It leaves out ticket sales, marketing and how scarce stars are.