The CBA Glossary
An explainer thing for the NBA's Collective Bargaining Agreement
How much does my team have to spend?
Whether your team is over the salary cap, under the salary cap, or in a position where it could go either way, you will likely want to know what they can spend on upgrading/reshaping the roster. To fully answer that question relies on a lot of variables, yet with the right salary information at hand, answers can be reached by following the logic below.
Threshold Tax calculations Tax Rates Repeater tax Rebates
The Luxury Tax Threshold
“Total Salaries” means the total Salaries included in the Team
Salary of all NBA Teams for or with respect to a Salary Cap Year in
accordance with this Agreement, other than the Salaries included in the
Team Salary of Expansion Teams during their first two (2) Salary Cap Years,
as determined in accordance with Article VII. For purposes of this
definition, Total Salaries:
(i) shall include: (a) all Incentive Compensation excluded from
Salaries in accordance with Article VII, Section 3(d) but
actually earned by NBA players during such Salary Cap Year,
and shall exclude all Incentive Compensation included in
Salaries in accordance with Article VII, Section 3(d) but not
actually earned by NBA players during such Salary Cap Year;
(b) the aggregate Salaries, if any, that are excluded from
Team Salaries pursuant to Article VII, Section 4(h); (c) any
consideration received by a retired player that is included in
Team Salary in accordance with the terms of Article XIII;
(d) all Two-Way Player Salaries earned in respect of such
Salary Cap Year; and (e) any Exhibit 10 Bonus a Team pays
its players pursuant to Article II, Section 3(s)(i);
(ii) shall be reduced by an amount equal to fifty percent (50%)
of the amount of any reductions made to NBA players’
Compensation in respect of such Salary Cap Year for a
12 Article I
suspension imposed by the NBA or a Team in accordance
with Article VI, Section 1 or Article XLI, Section 4(e); and
(iii) shall be adjusted consistent with Article VII,
Section 7(d)(6)(iv).
What Goes Into Tax Threshold Proximity Calculations
Tax Rates
The "repeater" tax
Tax rebates
Threshold Tax calculations Tax Rates Repeater tax Rebates
WHAT THE CBA ACTUALLY SAYS
- What the salary cap is From why we're even here, to the difference between a hard cap and soft cap.
- Fundamental salary basics Guarantees, proration, maximum raises/decreases, 10-day contracts, roster sizes, etc
MAIN TAKEAWAYS:
- The more your team are over the luxury tax threshold, the more your team will pay.
- The more regularly your team is over the luxury tax threshold, the more your team will pay, too.
- Teams under the tax threshold not only avoid penalty, but get rebates, which do not change their salary cap picture but which do improve the cash position.
- In addition to the luxury tax - whose effectiveness as a payroll deterrent had dwindled in light of the Golden State Warriors' extravagant spending - the NBA has recently introduced the "apron" thresholds, which exist in addition to the tax, and which are designed to reduce excessive spending not just through extra payments but through reduced spending options. See the Aprons page for more.