As its name suggests, the minimum salary exception can be used by an over-the-cap team to sign a player to a one- or two-year minimum-salary deal. The exception can also be used to acquire minimum-salary players via trade, without the players being counted for salary-matching purposes.
Players are entitled to varying minimum salaries based on how long they've been in the NBA. In 2012/13, a player with no prior NBA experience was eligible for a $473,604 minimum salary, while a player with 10+ years of experience was eligible for $1,352,181. Over the course of the current Collective Bargaining Agreement, the minimum salary will increase each season, as Larry Coon's CBA FAQ outlines. For both this season and next season, the breakdown is as follows:
Because the NBA doesn't want clubs to shy away from signing more expensive veteran players, the league reimburses teams for a portion of a minimum-salary player's cost if he has three or more years of experience, as long as the contract isn't a multiyear deal. The minimum salary for a player with two years experience is the most a team will pay, and the largest cap hit it will take, for a one-year minimum contract. For instance, when the Lakers signed 14-year veteran Antawn Jamison for 2012/13 using the minimum salary exception, he earned $1,352,181, but the team's cap hit was just $854,389. The league will be reimbursing the Lakers for the remaining $497,792.
Most salary cap exceptions can only be used once each season. When a team uses its full mid-level exception to sign one or more players, the club can no longer use that exception until the following season. Unlike the mid-level and other cap exceptions, however, the minimum salary exception can be used any number of times in a single season. The Knicks, for example, currently have six players on minimum-salary deals.
Over-the-cap teams can use the minimum salary exception to acquire players in trades without having to worry about matching salaries. That's how the Thunder were able to trade for Ronnie Brewer and give up only a second-round pick.
Chuck Myron contributed to this post, which was initially published on May 7th, 2012.
Note: This is a Hoops Rumors Glossary entry. Our glossary posts will explain specific rules relating to trades, free agency, or other aspects of the NBA's Collective Bargaining Agreement. Larry Coon's Salary Cap FAQ was used in the creation of this post.