Hoops Rumors Glossary: Minimum Salary Exception

The minimum salary exception is something of a last resort for capped-out teams seeking to add players, as well as for players seeking NBA contracts, but it’s the most commonly used cap exception. It allows an over-the-cap team to sign a player to a one- or two-year minimum-salary deal, as its name suggests.

Teams can use the exception multiple times in a given league year, allowing clubs that have spent all of their cap room and other exceptions an avenue to add to their rosters. It also allows for the acquisition of minimum-salary players via trade, and players signed via the minimum salary exception don’t count as incoming salary for salary-matching purposes.

Players are entitled to varying minimum salaries based on how long they’ve been in the NBA. In 2017/18, a player with no prior NBA experience was eligible for a $815,615 minimum salary, while a player with 10 or more years of experience was eligible for $2,328,652. Over the course of the current Collective Bargaining Agreement, the minimum salary will increase each season. For 2018/19, the breakdown is as follows:

Years in NBA
0 $838,464
1 $1,349,383
2 $1,512,601
3 $1,567,007
4 $1,621,415
5 $1,757,429
6 $1,893,447
7 $2,029,463
8 $2,165,481
9 $2,176,260
10+ $2,393,887

Those numbers demonstrate the wide disparity between the minimum salary for rookies and for long-tenured players. A minimum-salary veteran of 10 or more seasons will earn almost three times as much as a rookie making the minimum next season.

The NBA doesn’t want those pricier deals to discourage clubs from signing veterans, however, so 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 is a one-year deal. For instance, when the Cavaliers signed 14-year veteran Dwyane Wade to a one-year pact for 2017/18 using the minimum salary exception, the contract called for a salary of $2,328,652, but the team’s cap hit was just $1,471,382. The league reimburses the Cavs for the remaining $857,270, which is important for a Cleveland team with a massive projected tax bill.

Most salary cap exceptions can only be used once each season. For example, 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 though, the minimum salary exception can be used any number of times in a single season. The Cavs, for instance, used the minimum salary exception to sign Jeff Green, Derrick Rose, and Jose Calderon in addition to Wade.

While many exceptions begin to prorate on January 10, the minimum salary exception prorates from the first day of the regular season. Under the new CBA, the season is 177 days long, so if a player signs after five days have passed, he would only be paid for 172 days. That’s what happened this season with Jameer Nelson, who joined the Pelicans via the minimum salary exception on October 22, the sixth day of the regular season, making his salary and cap hit 172/177 of their usual amounts. Instead of a $1,471,382 cap charge for New Orleans, Nelson’s cap charge is $1,429,818. Meanwhile, his salary is $2,262,871 instead of $2,328,652.

Finally, the vast majority of 10-day contracts are for the minimum salary, and often the minimum salary exception is the only way for clubs to accommodate any 10-day deals.

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 and the Basketball Insiders salary pages were used in the creation of this post.

Earlier versions of this post were published in 2012, 2013, 2014, and 2015 by Luke Adams and Chuck Myron.

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