Hoops Rumors Glossary News & Rumors

The Pistons have just shy of $110MM in guaranteed money committed to player salaries for 2026/27. However, even though next season’s salary cap is expected to come in at $165MM, Detroit won’t begin the 2026 offseason with $55MM in cap room to spend.

In fact, the Pistons technically won’t open the new league year with any cap space at all. Each of Detroit’s own free agents will be assigned a free agent amount – or “cap hold” – until the player signs a new contract or the Pistons renounce his rights.

The general purpose of a cap hold is to prevent teams from using room under the cap to sign free agents before using Bird rights to re-sign their own free agents. If a team wants to take advantage of its cap space, it can renounce the rights to its own free agents, eliminating those cap holds. However, doing so means the team will no longer hold any form of Bird rights for those players — if the team wants to re-sign those free agents, it would have to use its cap room or another kind of cap exception.

The following criteria are used for determining the amount of a free agent’s cap hold:

• First-round pick coming off rookie contract: 300% of the player’s previous salary if prior salary was below league average; 250% of previous salary if prior salary was above league average.
• Bird player: 190% of previous salary (if below league average) or 150% (if above average).
• Early Bird player: 130% of previous salary.
• Non-Bird player: 120% of previous salary.
• Minimum-salary player: Two-year veteran’s minimum salary, unless the free agent only has one year of experience, in which case it’s the one-year veteran’s minimum.
• Two-way player: One-year veteran’s minimum salary.

A cap hold for a restricted free agent can vary based on his contract status. A restricted free agent’s cap hold is either his free agent amount as determined by the criteria mentioned above or the amount of his qualifying offer, whichever is greater.

No cap hold can exceed the maximum salary for which a player can sign. For example, the cap hold for a Bird player earning more than the NBA average is 150% of his previous salary, as noted above. But for a Bird player like Lakers forward LeBron James, whose cap charge this season was $52,627,153, 150% of his previous salary would be nearly $79MM, far beyond his projected maximum salary.

Instead, James’ cap hold would be equivalent to the maximum salary for a player with at least 10 years of NBA experience. Based on a projected cap of $165MM, that figure works out to $57,750,000. If the Lakers want to re-sign LeBron using his Bird rights, that cap hold would remain on their books until his new deal is official and his new first-year salary replaces the hold.

One unusual case involves players on rookie contracts whose third- or fourth-year options are declined. The amount of their declined option becomes their cap hold, and if the player’s team wants to re-sign him, his starting salary can’t exceed that amount.

For instance, the Magic declined Jett Howard‘s 2026/27 fourth-year option last fall. Because Howard’s rookie scale option was turned down, Orlando won’t be able to offer him a starting salary this offseason worth more than $7,337,938, the amount of that option. That figure is also his cap hold.

That rule is in place so a team can’t circumvent the rookie scale and decline its option in an effort to give the player a higher salary. It applies even if the player is traded after his option is declined, but only to the club the player is part of at season’s end.

Kobe Brown is a prime example. The Clippers declined his $4,792,058 team option for 2026/27 last fall, then traded him to the Pacers during the season. Indiana is now prohibited from offering Brown more than $4,792,058 as free agent and will carry that cap hold for him until he’s renounced or signs elsewhere. But any other team, including the Clippers, could offer him a salary exceeding that figure.

If a team holds the rights to fewer than 12 players, cap holds worth the rookie minimum salary are assigned to fill out the roster. So, even if a front office chooses to renounce its rights to all of its free agents and doesn’t have any players under contract, the team wouldn’t be able to fully clear its cap.

An incomplete roster charge in 2026/27 projects to be worth $1,358,084, meaning a team without any guaranteed salary or any other cap holds on its books would have closer to $149MM in cap room than $165MM due to its 12 rookie minimum holds.

A player who has been selected in the draft but has not yet officially signed his rookie contract only has a cap hold if he was a first-round selection. A cap hold for a first-round pick is equivalent to 120% of his rookie scale amount, based on his draft position. An unsigned second-round pick doesn’t have a cap hold.

Cap holds aren’t removed from a team’s books until the player signs a new contract or has his rights renounced by the club. For example, the Warriors are still carrying cap holds on their books for retired players like Matt Barnes and David West, who never signed new contracts since playing for Golden State nearly a decade ago.

Keeping those cap holds gives teams some degree of cushion to help them remain above the cap and take advantage of their full arsenal of mid-level, bi-annual, and trade exceptions, among other advantages afforded capped-out teams. If and when the Warriors want to maximize their cap room, they’ll renounce Barnes and West. But they’ve remained over the cap – and haven’t needed to remove those holds – since those players became free agents in 2017 and 2018, respectively.

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.

Earlier versions of this post were published in previous years by Luke Adams and Chuck Myron.

Players eligible for restricted free agency don’t become restricted free agents by default. In order to make a player a restricted free agent, a team must extend a qualifying offer to him — a player who doesn’t receive one becomes an unrestricted free agent instead.

The qualifying offer, which is essentially just a one-year contract offer, varies in amount depending on a player’s service time and previous contract status.

If a player reaches free agency with three or fewer years of NBA service time under his belt, his qualifying offer is worth whichever of the following amounts is greater:

• 135% of his prior salary (or 125% of his prior salary, if he signed his contract before the 2023/24 league year).
• His minimum salary, plus $200K.

For instance, after earning $1,955,377 this season, Knicks big man Ariel Hukporti will be eligible for a qualifying offer this season if New York wants to make him a restricted free agent. What would that qualifying offer be worth?

Well, 135% of Hukporti’s prior salary would be $2,639,759. Hukporti projects to have a minimum salary worth $2,450,000 in 2026/27. Adding $200K to that figure gets us to $2,650,000. His qualifying offer would be worth the greater of those two amounts: $2,650,000.

Hukporti’s minimum-salary projection is based on an estimated $165MM cap. If the cap were to only increase to $163MM next season, his projected minimum salary would dip to $2,420,018. Adding $200K to that figure would work out to $2,620,018, so in that scenario, 135% of his prior salary would be the larger amount of the two and would be his qualifying offer.

Conversely, Hukporti’s teammate Mohamed Diawara earned just $1,272,870 last season and his minimum salary for 2026/27 is projected at $2,185,633. Adding $200K to that projected minimum gets us $2,385,633, whereas 135% of his previous salary is just $1,718,375. While the exact amount of Diawara’s qualifying offer will depend on precisely where the salary cap lands, we know it’ll be based on his minimum salary plus $200K, since there’s zero chance that figure will come in lower than 135% of his prior salary.

It’s not a certainty yet that the cap will increase to $165MM, so Hukporti’s and Diawara’s qualifying offer projections are tentative for now.

The qualifying offer for a former first-round pick coming off his rookie scale contract is determined by his draft position. Under the previous CBA, the qualifying offer for a first overall pick was 130% of his fourth-year salary, while for a 30th overall pick it was 150% of his previous salary — QOs for the rest of the first-rounders fall somewhere in between. Those numbers will increase to 140% and 160%, respectively, under the new CBA, beginning when the 2023 draft class reaches restricted free agency in 2027.

The full first-round scale for the draft class of 2022, whose first-rounders will be hitting free agency this summer, can be found here, courtesy of RealGM.

A wrinkle in the Collective Bargaining Agreement complicates matters for some RFAs-to-be, since a player’s previous usage can impact the amount of his qualifying offer. Certain players who meet – or fail to meet – the “starter criteria,” which we break down in a separate glossary entry, become eligible for higher or lower qualifying offers. Here’s how the starter criteria affects QOs:

• A top-14 pick who does not meet the starter criteria will receive a same qualifying offer equal to 120% of the amount applicable to the 15th overall pick.
  • Note: In 2026, the value of this QO will be $8,774,590.
• A player picked between 10th and 30th who meets the starter criteria will receive a qualifying offer equal to 120% of the amount applicable to the ninth overall pick.
  • Note: In 2026, the value of this QO will be $9,615,393.
• A second-round pick or undrafted player who meets the starter criteria will receive a qualifying offer equal to 100% of the amount applicable to the 21st overall pick.
  • Note: In 2026, the value of this QO will be $5,910,257.

Clippers guard Bennedict Mathurin is one example of a player who falls into the first group, since he didn’t meet the starter criteria this year. The No. 6 overall pick in 2021, Mathurin will be eligible this offseason for a QO worth $8,774,590 instead of $12,256,222, the amount for his draft slot.

Conversely, Suns center Mark Williams (a former No. 15 overall pick) met the starter criteria and will now be eligible for a QO worth $9,615,393 instead of $8,774,590.

A qualifying offer is designed to give a player’s team the right of first refusal. Because the qualifying offer acts as the first formal contract offer a free agent receives, his team then has the option to match any offer sheet the player signs with another club.

A player can also accept his qualifying offer, if he so chooses. He then plays the following season on a one-year contract worth the amount of the QO, and becomes an unrestricted free agent at season’s end, assuming he has at least four years of NBA experience. A player can go this route if he wants to hit unrestricted free agency as early as possible, or if he feels like the QO is the best offer he’ll receive. Accepting the qualifying offer also gives a player the right to veto trades for the season.

Here are a few more details related to qualifying offers:

• A team that issues a qualifying offer can unilaterally withdraw that offer anytime up until July 13.
• A player who receives a qualifying offer has a deadline of October 1 to accept it. He and the team can agree to extend that deadline, but if the deadline passes with no resolution, the player remains a restricted free agent without having the QO as a fallback option.
• A different set of rules applies to players coming off two-way contracts. For most of those players, the qualifying offer would be equivalent to a one-year, two-way salary, with a small portion (known as the “maximum two-way protection amount”) guaranteed. For 2026/27, that partial guarantee projects to be worth $91,000.
• A player who is coming off a two-year, two-way deal; has already been on two-way deals with his current team for at least two seasons; has spent parts of three seasons with his current team on two-way deals; or has accumulated four years of NBA service would be eligible for a qualifying offer equivalent to a standard, minimum-salary NBA contract, with a small portion (known as the “two-way QO protection amount”) guaranteed. For 2026/27, that partial guarantee projects to be worth $109,200.

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.

Earlier versions of this post were published in previous years.

Players and teams have to meet certain criteria to earn Bird rights and Early Bird rights, but Non-Bird rights are practically a given.

They apply to a player who has spent a single season or less with his team, as long as he finishes the season on an NBA roster and is on a standard contract (rather than a hardship or 10-day deal). Even a player who signs a rest-of-season contract right before the regular season finale and spends just a single day with his club would have Non-Bird rights in the offseason.

Teams can also claim Non-Bird rights on Early Bird free agents if they renounce them. The primary motivator to do so would be to allow the team to sign the free agent to a one-year contract or a one-year deal with a second-year option, a move that’s not permitted via Early Bird rights.

Teams are eligible to sign their own free agents using the Non-Bird exception for a salary starting at 120% of the player’s previous salary, 120% of the minimum salary, or the amount of a qualifying offer (if the player is a restricted free agent), whichever is greatest. Contracts can be for up to four years, with 5% annual raises.

The cap hold for a Non-Bird player is 120% of his previous salary, unless his previous salary was the minimum. In that case, the cap hold is equivalent to the two-year veteran’s minimum salary. If a Non-Bird free agent only has one year of NBA experience, his cap hold is equivalent to the one-year veteran’s minimum salary.

The salary limitations that apply to Non-Bird rights are more severe than those pertaining to Bird rights or Early Bird rights, so in many cases, the Non-Bird exception may not be enough to retain a well-regarded free agent. For instance, the Sixers held Guerschon Yabusele‘s Non-Bird rights last summer, but couldn’t have used them to match or exceed the offer the veteran big man received from the Knicks.

Because Yabusele was on a minimum-salary contract in 2024/25, Philadelphia’s ability to offer a raise using the Non-Bird exception was extremely limited — the Sixers would have only been able to offer 120% of Yabusele’s minimum salary using his Non-Bird rights, which worked out to $2,854,644. New York used its taxpayer mid-level exception to give him a two-year, $11.3MM contract, comfortably topping Philadelphia’s maximum Non-Bird offer.

The Warriors may end up in a similar situation this offseason with De’Anthony Melton, who will only have Non-Bird rights after playing out a one-year, minimum-salary contract. Golden State will only be able to offer him up to 120% of his 2026/27 minimum salary using the Non-Bird exception. That would work out to a projected $4.21MM.

Given how well Melton has performed when healthy this season, that likely won’t be enough to retain him, meaning the Warriors would have to be willing to use another cap exception – such as the mid-level – to make a competitive offer.

Holding Non-Bird rights on a free agent didn’t help the Sixers with Yabusele and might not be enough for the Warriors with Melton, but there are cases in which the exception proves useful.

The Sixers, for instance, only had Non-Bird rights on Justin Edwards last offseason, but that gave them the ability to offer him a three-year contract, exceeding the one- or two-year minimum-salary offer they could have made if he were an outside free agent. Non-Bird rights were also used to sign Nicolas Batum (Clippers), Jaxson Hayes (Lakers), Ajay Mitchell (Thunder), Gary Trent Jr. (Bucks), and Fred VanVleet (Rockets) — VanVleet had his Early Bird rights knocked down to Non-Bird rights so that Houston could give him a second-year player option.

The higher a player’s previous salary is, the less restrictive his Non-Bird rights are. For example, Hawks forward Jonathan Kuminga will only have Non-Bird rights this summer if his team option is declined, but Atlanta would have significantly more flexibility with him than Golden State will with Melton, since Kuminga has a $22.5MM base salary this season. The Hawks could offer Kuminga a starting salary of up to $27MM (120% of $22.5MM) using the Non-Bird exception.

Finally, it’s worth noting that a player who re-signs with his previous team on a one-year deal (or a two-year deal that includes a second-year option) and will have Early Bird or Bird rights at the end of that contract would surrender those rights if he consents to a trade. In that scenario, he’d only finish the season with Non-Bird rights. Kuminga and Cavaliers guard James Harden are among the players who fit that bill this season.

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.

Earlier versions of this post were published in previous years by Luke Adams and Chuck Myron.

Bird rights offer teams the chance to sign their own free agents without regard to the salary cap, but they don’t apply to every player. Other salary cap exceptions are available for teams to keep players who don’t qualify for Bird rights. One such exception is the Early Bird, which applies to players formally known as Early Qualifying Veteran Free Agents.

While the Bird exception is for players who have spent three seasons with one club without changing teams as a free agent, Early Bird rights are earned after just two such seasons. Virtually all of the same rules that apply to Bird rights apply to Early Bird rights, with the requirements condensed to two years rather than three.

Players still see their Bird clocks restart by changing teams via free agency, being claimed in an expansion draft, or having their rights renounced. A player who is traded can also have his Bird clock reset if he approves a move after having re-signed with his previous team on a one-year contract (or a one-year contract with a second-year option) earlier in the league year.

As is the case with Bird rights, a player’s clock stops when he’s released by a team and clears waivers, but it would pick up where it left off if he re-signs with that same team down the road without joining another club in the interim.

For instance, if the Pacers were to re-sign Tony Bradley to a rest-of-season contract, he would have Early Bird rights this offseason because – even though he was waived earlier this season – he would be on track to finish a second consecutive year with Indiana and didn’t join another team in the interim.

The crucial difference between Bird rights and Early Bird rights involves the limitations on contract offers. Bird players can receive maximum-salary deals for up to five years, whereas the most a team can offer an Early Bird free agent without using cap space is 175% of his previous salary (up to the max) or 105% of the league-average salary in the previous season, whichever is greater.

These offers are also capped at four years rather than five, and the new contracts must run for at least two years — the second season can be non-guaranteed, but can’t be a team or player option. Raises are maxed out at 8% per season.

Tobias Harris (Pistons), Quinten Post (Warriors), Spencer Jones (Nuggets), and Andre Drummond (Sixers) are among the free agents who will have Early Bird rights during the 2026 offseason. Isaiah Hartenstein (Thunder) is another notable player who would join that group if his team option is declined.

In some instances, teams can benefit from having Early Bird rights instead of full Bird rights if they’re trying to preserve cap space. The cap hold for an Early Bird player is 130% of his previous salary, significantly less than most Bird players, whose cap holds range from 150-300% of their previous salaries.

However, having a player’s Early Bird rights instead of his full Bird rights puts a team at a disadvantage in other cases. For example, when Hartenstein reached free agency in 2024, his Early Bird rights limited the Knicks to a maximum four-year offer of $64.2MM ($72.5MM after incentives), a figure the Thunder had no problem topping using cap room when they signed Hartenstein to a three-year, $87MM deal.

In order to match or exceed Oklahoma City’s offer, New York would have had to use cap room of its own, which the team didn’t have available — having Hartenstein’s full Bird rights would’ve allowed the Knicks to give him a far more substantial contract without requiring cap space.

Meanwhile, some players with limited NBA experience are subject to a special wrinkle involving Early Bird rights, known as the Gilbert Arenas provision, which applies to players who have only been in the league for one or two years. We cover the Arenas provision in a separate glossary entry, so you can read up on the details there.

Essentially, the Arenas provision protects teams from a situation like the ones the Knicks found themselves in with Hartenstein, allowing them to match offer sheets on their restricted free agents without necessarily using Bird rights or cap room to do so.

Post, Jones, and Knicks center Ariel Hukporti are among the restricted free agents on track to be subject to the Arenas provision in 2026, though it’s unclear whether any of them will command a significant enough offer to bring that rule into play.

Finally, one more distinction between Bird rights and Early Bird rights applies to waivers. Players who are claimed off waivers retain their Early Bird rights, just as they would if they were traded. Those who had full Bird rights instead see those reduced to Early Bird rights for their next free agency period if they’re claimed off waivers.

This rule stems from a 2012 settlement between the league and the union in which J.J. Hickson was given a special exception and retained his full Bird rights for the summer of 2012 even though he had been claimed off waivers that March.

Here’s an example from last season that combines a pair of Early Bird rules: former Sixers big man Paul Reed had full Bird rights with Philadelphia before being waived by the team in July of 2024. Reed was claimed off waivers by the Pistons at the time, was waived again several months later, then was re-signed by Detroit, ultimately finishing the 2024/25 season with the Pistons.

As a result of being claimed off waivers, Reed lost his Bird rights but retained Early Bird rights. He was able to hang onto those Early Bird rights when he was subsequently waived and re-signed by Detroit, since he didn’t join another team in between those transactions, which would have reset his Bird clock. The Pistons eventually used the Early Bird exception to re-sign Reed during the 2025 offseason.

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.

Earlier versions of this post were published in previous years by Luke Adams and Chuck Myron.

The Bird exception, named after Larry Bird, is a rule included in the NBA’s Collective Bargaining Agreement that allows teams to go over the salary cap to re-sign their own players. A player who qualifies for the Bird exception, formally referred to as a Qualifying Veteran Free Agent, is said to have “Bird rights.”

The most basic way for a player to earn Bird rights is to play for the same team for at least three seasons, either on a long-term deal or on separate one- or two-year contracts. Still, there are other criteria. A player retains his Bird rights in the following scenarios:

1. He changes teams via trade.

For instance, the Warriors will hold Kristaps Porzingis‘ Bird rights when he reaches free agency this offseason, despite just acquiring him in February. His Bird clock didn’t reset when he was traded from Atlanta to Golden State.

2. He finishes a third season with a team after having only signed for a partial season with the club in the first year.

The Wizards signed Tristan Vukcevic during the second half of the 2023/24 season, adding him to their roster in March 2024. If his contract were expiring this offseason, Vukcevic would have Bird rights despite not spending three full seasons with Washington, because that partial season in ’23/24 started his Bird clock.

3. He signs a full-season contract (ie. not a 10-day deal), his team waives him, and he cleared waivers. He subsequently re-signs with the club (without joining another team in the interim) and ultimately remains under contract through a third season.

This one’s a little confusing, but let’s use a hypothetical scenario involving Pistons forward Tobias Harris to illustrate what it would look like. Harris signed with Detroit as a free agent in 2024 and is nearing the end of his second season with the team.

If the Pistons were to waive Harris now, then re-signed him in July without him joining a new team in the interim, his Bird clock would pick up where it left off. He’d have full Bird rights in the summer of 2027, since he would’ve spent part or all of each of the previous three seasons with the Pistons without changing teams in between.

Although the Pistons could restart Harris’ Bird clock by re-signing him, they wouldn’t be able to use any form of Bird rights to add him to their roster this offseason in this hypothetical scenario — they would have to use cap room or another exception to do so. His Bird clock would only resume once he’s back under contract.

This rule also applies to players who are waived after they already have Bird rights. For example, let’s say the Kings were to waive DeMar DeRozan this offseason before his $25.74MM salary for 2026/27 becomes guaranteed. Releasing DeRozan would mean losing his Bird rights, but if they were to re-add him on a one-year contract after waiving him, the Kings would regain those full Bird rights in 2027.

That’s not really a realistic scenario for DeRozan, who would almost certainly join a new team if he were waived by the Kings. But it’s an example of how Bird rights would function in that sort of situation.

A player sees the clock on his Bird rights reset to zero in the following scenarios:

1. He changes teams via free agency.
2. He is waived and is not claimed on waivers (except as in scenario No. 3 above).
3. His rights are renounced by his team. However, as in scenario No. 3 above, a player’s Bird clock picks up where it left off if he re-signs with the club that renounced them without having signed with another NBA team. For example, Kelly Oubre Jr. had his rights renounced by the Sixers during the summer of 2024, following his first year with the team. He signed a new deal with Philadelphia later that offseason, so his Bird clock picked up where it left off, and he’s on track to have full Bird rights this summer, two years later.
4. He is selected in an expansion draft.

Players on two-way contracts accumulate Bird rights in the same way that players on standard contracts do. Knicks guard Kevin McCullar Jr. has been under contract with New York on two-way deals in each of the past two seasons. If he were to sign another one-year, two-way deal this summer and then reached free agency in 2027, he’d have full Bird rights at that time.

If a player who would have been in line for Bird rights at the end of the season is waived and claimed off waivers, he would retain only Early Bird rights.

It’s also worth noting that there’s one specific scenario in which a player with Bird rights can lose them in a trade. A player who re-signs with his previous team on a one-year contract (or a one-year deal with a second-year option) would have his Bird clock reset if he’s traded later that season. As such, he receives the ability to veto trades so he can avoid that scenario, though a team can require him to waive that right as a condition of their contract agreement.

[RELATED: Players who had the ability to veto trades in 2025/26]

Jonathan Kuminga is an example of a player who lost his Bird rights as a result of this rule, since he re-signed last summer with the Warriors on a deal that included a second-year team option, then was traded to the Hawks last month. He’ll have Non-Bird rights at the end of this season if Atlanta declines that team option for 2026/27.

The Bird exception was designed to allow teams to keep their best players, even when those teams don’t have the cap room necessary to do so.

When a player earns Bird rights, he’s eligible to re-sign with his team for up to five years and for any price up to his maximum salary (with 8% annual raises) when he becomes a free agent, no matter how much cap space the team has — or doesn’t have.

The maximum salary varies from player to player depending on how long he has been in the league, but regardless of the precise amount, a team can exceed the salary cap to re-sign a player with Bird rights.

A team with a Bird free agent is assigned a “free agent amount” – also called a cap hold – worth either 190% of his previous salary (for a player with a salary below the league average) or 150% of his previous salary (for an above-average salary), up to the maximum salary amount.

For players coming off rookie scale contracts, the amounts of those cap holds are 300% and 250%, respectively. The Pistons, for instance, will have a cap hold worth $19,449,432 for Jalen Duren on their books this offseason — 300% of his $6,483,144 salary for 2025/26.

Detroit could renounce Duren and generate nearly $20MM in additional cap flexibility, but doing so would cost the Pistons the ability to re-sign him using Bird rights, which would force them to use either cap room or a different cap exception to re-sign him. As such, we can count on the Pistons keeping Duren’s cap hold on their books until his free agency is resolved.

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.

Earlier versions of this post were published in previous years by Luke Adams and Chuck Myron.

The minimum salary exception is something of a last resort for capped-out teams looking to add players, as well as for players seeking NBA contracts, but it’s one of the most commonly used cap exceptions.

As its name suggests, the minimum salary exception allows an over-the-cap team to sign a player to a minimum-salary deal. A contract signed using the minimum salary exception can be a one- or two-year deal, but can’t cover more than two seasons.

Teams can use the exception multiple times in a league year, giving clubs that have used all of their cap room and other exceptions an avenue to fill out their rosters. The exception also accommodates teams’ acquisitions of minimum-salary players via trade, as 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 2025/26, a player with no prior NBA experience was eligible for a $1,272,870 minimum salary, while a player with 10 or more years of experience was eligible for $3,634,153.

[RELATED: NBA Minimum Salaries For 2025/26]

Under the NBA’s current Collective Bargaining Agreement, the minimum salary is adjusted each season to reflect the year-to-year salary cap change. If the cap increases by 5%, so will minimum salaries. If the cap doesn’t change from one season to the next, neither will minimum salaries.

Our minimum-salary estimates for 2026/27, based on a projected salary cap of $166MM, can be found right here.

There’s a wide disparity between the minimum salary for rookies and for long-tenured players, with a minimum-salary veteran of 10+ seasons earning nearly 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 example, when the Kings signed 17-year veteran Russell Westbrook to a one-year pact ahead of the 2025/26 season using the minimum salary exception, he locked in a salary of $3,634,153, but the team’s cap hit was just $2,296,274, equivalent to the minimum salary for a player with two years of NBA experience. The league will reimburse the Kings for the difference between Westbrook’s salary and cap hit ($1,337,879).

Many 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 league year. 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 Bucks, for instance, used the minimum salary exception to sign Gary Harris, Taurean Prince, Jericho Sims, Thanasis Antetokounmpo, Cole Anthony, and Chris Livingston last offseason. They also used it during the season to add Cam Thomas on a rest-of-season contract.

While many exceptions begin to prorate midway through the regular season, the minimum salary exception prorates beginning after opening night. If a season is 174 days long and a player signs a minimum-salary deal after 25 days have passed, he would only be paid for 149 days.

An example of a prorated minimum salary occurred when the Kings signed Killian Hayes on March 15. Hayes has five years of NBA experience, so he would’ve been eligible for a full-season minimum salary of $2,667,947. But because he signed on the 146th day of the regular season, he received just 29/174ths of that amount: $444,658.

In cases where a veteran player signs a one-year contract using the minimum salary exception midway through a season, his cap hit is prorated in the same way that his salary is.

For example, when Tyus Jones joined the Nuggets on March 5, there were 39 days left in the ’25/26 season. He earned a rest-of-season salary of $814,552 (39/174ths of his full-season minimum of $3,634,153), while his cap hit was $514,682 (39/174ths of $2,296,274, the minimum salary for a player with two years of experience).

When a player signs a two-year contract using the minimum salary exception, his second-year salary is locked in as part of that agreement. Depending on the amount of the second-year cap increase, he may end up making more or less than the amount he would have earned if he’d instead signed two consecutive one-year minimum contracts.

On a two-year, minimum-salary deal, the player’s second-year salary is worth 105% of the first-year minimum for a player with the same years of NBA experience.

For instance, a rookie signing a two-year minimum-salary deal in 2025/26 would be assured of $2,150,917 in ’26/27, once he has one year of NBA experience under his belt — that’s 5% more than the minimum for a player with one year of NBA experience in ’25/26 ($2,048,494).

Finally, it’s worth noting that the minimum salary exception can be used to claim a player off waivers in the same way that it can be used to trade for a player. However, in the case of both trades and waiver claims, a minimum-salary player can’t be acquired using the minimum salary exception if his contract is for more than two years or if his salary exceeded the minimum in any previous year of the contract.

When the Jazz waived Vince Williams Jr. earlier this month, he was earning a $2,301,587 salary, which was his minimum for this season at the time he signed. But Williams was in the third year of his contract and had earned more than the minimum in his first season of that deal back in 2023/24 — both of those factors made him ineligible to be claimed using the minimum salary exception, so if a team had wanted to claim him, it would have needed to use cap room or another exception, such as the mid-level or bi-annual.

Here are a few more notes on the minimum salary exception:

• Players signed using the minimum salary exception are eligible for trade bonuses, but not incentive bonuses. A minimum-salary player with a trade bonus cannot be acquired in a trade using the minimum salary exception unless he waives that bonus.
• When a minimum-salary player is traded during the season, any reimbursement from the NBA is split between his two teams. It’s prorated based on the number of days he spends with each club.
• If a minimum-salary player with a non-guaranteed salary is waived before he exceeds the minimum for a two-year veteran, his team won’t be reimbursed for any portion of his salary.
• Every 10-day contract is worth a prorated minimum salary. The NBA also reimburses teams for a portion of the 10-day minimum salary for veterans with three or more years of experience.
• A team isn’t permitted to sign a player using the minimum salary exception if the deal would push that club’s salary beyond its hard cap. The only exception to this rule is when a team is using the exception to sign a player to an Exhibit 9 or Exhibit 10 contract prior to the regular season, since those deals don’t count against the cap until the season begins.

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 previous years by Luke Adams and Chuck Myron.

The mid-level exception is the tool most frequently used by over-the-cap teams to sign free agents from other teams to contracts worth more than the veteran’s minimum. But that’s not the only exception those clubs have to squeeze an extra player onto the payroll. The bi-annual exception is a way for a team to sign a player who may command more than the minimum salary but less than the mid-level.

In addition to allowing a team to sign a player to a contract, the bi-annual exception can be utilized to acquire a player via trade or waiver claim, as long as his contract fits within his exception. That means he can’t be under contract for more than two years and his current-year salary can’t exceed the amount of the BAE.

As its name suggests, the bi-annual exception can only be used every other season. Even if a team uses only a portion of the exception, it’s off-limits during the following league year.

During the 2025/26 league year, two teams – the Rockets and Clippers – were ineligible to use the bi-annual exception at all, since they used it in 2024/25.

Five teams have used the bi-annual exception in ’25/26, with the Lakers signing Marcus Smart, the Pistons promoting Daniss Jenkins from a two-way contract, and the Hornets, Jazz, and Wizards using their BAEs to trade for Malaki Branham, Kevin Love, and Blake Wesley, respectively. Those five clubs won’t have the exception at their disposal during the 2026/27 league year.

The bi-annual exception is available only to a limited number of clubs, even among those that didn’t use the exception during the previous season. Teams that create and use cap space forfeit their bi-annual exception. Additionally, teams lose access to the bi-annual exception when they operate over the first “tax apron,” a figure approximately $7MM above the tax line this season. So, only teams over the cap and under the first apron can use the BAE.

If a team uses all or part of the bi-annual exception, the first tax apron becomes the club’s hard cap for that season. Teams that sign a player using the BAE are permitted to subsequently go under the salary cap, but they can’t go over the first apron at any time during the season once the contract is signed.

[RELATED: NBA Teams With Hard Caps In 2025/26]

Although a team with a salary exceeding the first tax apron isn’t permitted to use the bi-annual exception, that team could gain access to the BAE by shedding salary. As long as the team’s salary would be below the first tax apron upon the completion of the BAE transaction – and remains below that threshold for the rest of the season – that club is permitted to use the exception, no matter how high its salary might have been earlier in the league year.

Under the NBA’s current Collective Bargaining Agreement, the value of the bi-annual exception in future league years is tied to the value of the salary cap. The BAE comes in at 3.32% of that season’s cap and is rounded to the nearest thousand.

For instance, this season’s cap is $154,647,000; 3.32% of that amount is $5,134,280.40. Rounding to the nearest thousand gets us to $5,134,000, which is the maximum starting salary for a bi-annual signing in 2025/26. The starting salary for the BAE in 2026/27 currently projects to be worth $5,511,000, based on a $166MM cap projection.

A player who signs a contract using the bi-annual exception is eligible for a one- or two-year deal, with a 5% raise for the second season. For a player signed using the BAE in 2025/26, the maximum value of a two-year contract is $10,524,700.

Teams also have the option of splitting the bi-annual exception among multiple players, though that happens much less frequently than it does with the mid-level exception, since a split bi-annual deal may not even be worth more than a veteran’s minimum salary.

The bi-annual exception begins to prorate downward on January 10 each year, decreasing in value by 1/174th each day until the end of the regular season. However, as is the case with the mid-level exception, a team that uses its BAE between Jan. 10 and the trade deadline wouldn’t be subject to that proration and could use the full amount it has left on the exception — the proration for those days between Jan. 10 and the deadline is retroactively applied beginning on the day after the trade deadline.

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.

Earlier versions of this post were published in previous years by Luke Adams and Chuck Myron.

The mid-level exception is one of the tools that allows over-the-cap NBA teams to sign free agents from other clubs for more than the minimum salary. It helps ensure that virtually every team heads into the offseason with a little spending flexibility.

Teams are eligible to use specific types of mid-level exceptions depending on their proximity to the salary cap. The most lucrative form of mid-level is available to teams that are over the cap but below the first tax apron. Clubs above the first apron, and even those operating under the cap, have access to lesser versions of the MLE.

Here’s a breakdown of how the various forms of the exception are structured:

For teams over the cap and below the first tax apron:

• Commonly called either the full mid-level exception or the non-taxpayer mid-level exception.
• Contract can cover up to four seasons.
• First-year salary is worth $14,104,000 in 2025/26; maximum four-year value is $60,647,200.
• Projected to be worth $15,139,000 in 2026/27; projected maximum four-year value is $65,097,700.
• Once used, the team cannot surpass the first tax apron (approximately $7MM above the tax line in 2025/26) for the remainder of the season.
• This form of mid-level exception can be used to acquire a non-free-agent via trade or waiver claim, as long as his contract fits into the exception (in terms of years and dollars). Only the player’s current-year salary must fit into the MLE.

For teams operating under the cap:

• Commonly called the room exception.
• Contract can cover no more than three seasons.
• First-year salary is worth $8,781,000 in 2025/26; maximum three-year value is $27,660,150.
• Projected to be worth $9,425,000 in 2026/27; projected maximum three-year value is $29,688,750.
• This form of mid-level exception can be used to acquire a non-free-agent via trade or waiver claim, as long as his contract fits into the exception (in terms of years and dollars). Only the player’s current-year salary must fit into the room exception.

For teams over the cap and the first tax apron, but below the second apron:

• Commonly called the taxpayer mid-level exception.
• Contract can cover up to two seasons.
• First-year salary is worth $5,685,000 in 2025/26; maximum two-year value is $11,654,250.
• Projected to be worth $6,102,000 in 2026/27; projected maximum two-year value is $12,509,100.
• Once used, the team cannot surpass the second tax apron (approximately $20MM above the tax line in 2025/26) for the remainder of the season.
• This form of mid-level exception cannot be used to acquire a non-free-agent via trade or waiver claim.

For teams over the cap and both tax aprons:

• No mid-level exception is available.

Each form of the mid-level allows for annual raises of up to 5% of the value of the first season’s salary.

Teams can use their entire mid-level exception to sign a single player. The Pistons, Trail Blazers, Grizzlies, and Warriors took that route in 2025/26. Detroit and Portland used the full non-taxpayer mid-level exception ($14,104,000) on Caris LeVert and Damian Lillard, respectively; Memphis used its full room exception ($8,781,000) on Ty Jerome; and Golden State used its full taxpayer mid-level exception ($5,685,000) on Al Horford.

The Mavericks also only had the taxpayer portion of the mid-level exception available when they signed D’Angelo Russell to a two-year contract with a first-year salary of $5,685,000, though they’ve since moved below the tax line and are no longer limited to the taxpayer MLE.

Teams are also allowed to split the mid-level among multiple players, and that’s the route that many clubs prefer to take. For instance, the Wizards have used their MLE to acquire Russell ($5,685,000) and to sign Tristan Vukcevic ($2,857,143) and Jamir Watkins ($1,131,970) so far in ’25/26. They still have a small portion of the non-taxpayer mid-level available.

In the past, players drafted in the second round often signed contracts using a portion of the mid-level because the exception allows teams to offer more years and more money than the minimum salary exception provides. However, the second-round pick exception introduced in the league’s most recent Collective Bargaining Agreement has essentially eliminated the need for teams to use the MLE on second-round picks.

Still, if a team wants to sign an undrafted free agent to a longer-term contract or convert a two-way player to a multiyear deal, the mid-level can come in handy. Seven players who have been promoted from two-way deals to standard contracts in 2025/26 have been signed using the mid-level exception.

Some front offices prefer to leave all or part of their mid-level exception unused in the offseason so it’s still available during the regular season. This has become an increasingly common course of action, since the new CBA allows teams to use the non-taxpayer mid-level or room exception to take on players via trades. Even after the trade deadline passes, an unused portion of an MLE can still be useful to outbid a rival for a coveted target on the buyout market or to lock up an intriguing young player to a longer-term contract.

Unlike the bi-annual exception, the mid-level exception can be used every season. So whether or not a team uses any of its mid-level in 2025/26, each club below the second tax apron in ’26/27 will have the opportunity to use some form of the MLE.

The amount of each form of mid-level exception increases – or decreases – at the same rate as the salary cap, ensuring that its value relative to cap room remains about the same from year to year. So if the salary cap rises by 10%, the mid-level values would rise by the same amount.

Specifically, the CBA calls for the non-taxpayer mid-level exception to be worth 9.12% of the cap, while the room exception is worth 5.678% of the cap. Those figures are rounded to the nearest thousand.

Here are a few more notes related to the mid-level exception:

• A contract signed using a mid-level exception can include bonuses as long as the player’s maximum potential compensation doesn’t exceed the maximum value of the exception. For example, in 2025/26, a team wasn’t permitted to sign a player to a contract using the non-taxpayer mid-level exception that has a base salary of $14,104,000 and another $1MM in incentives. But a contract with a base salary of $13,104,000 and $1MM in incentives would have been permitted.
• A team is only allowed to use one form of mid-level exception in a given season. If an over-the-cap club uses a portion of its non-taxpayer mid-level exception, then sheds salary and dips below the cap, it would not then be permitted to use the room exception.
• Beginning on January 10, the value of a team’s unused mid-level exception begins to prorate downward. The exact amount of proration depends on how much of the MLE was unused as of January 10 and how many total days there are in the regular season. If a team had $7MM of its mid-level left on January 10 and there are 174 days in that season, the MLE would decrease in value by $40,230 per day (1/174th of $7MM).
• Crucially, this proration is retroactively applied beginning on the day after the trade deadline and doesn’t affect moves completed between January 10 and the trade deadline. This rule allows teams to fully access the remaining portion of their mid-level for deadline deals. That means that our hypothetical team with $7MM left on its mid-level as of January 10 would still have been able to use that full $7MM up until February 5 this season. But if it didn’t use any of its MLE between January 10 and the deadline, then as of February 6, that figure would drop to $5,873,563 (having decreased by $1,126,437, which is 28/174ths of $7MM).

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. Earlier versions of this post were published in previous years.

When NBA teams are in the process of filling out their training camp rosters, the most common form of deal signed by players around the league is the Exhibit 10 contract. An Exhibit 10 contract can be converted into a two-way deal or puts a player in line to earn a bonus if he’s waived and then joins his team’s G League affiliate.

Many of those non-guaranteed training camps also include an Exhibit 9 clause in addition to – or in place of – Exhibit 10 language.

An Exhibit 9 clause protects an NBA team in the event that a player suffers a significant injury in training camp.

If a player on a standard non-guaranteed contract without an Exhibit 9 clause suffered such an injury, his club would be required to pay him his salary until he’s healthy enough to play or until the end of that season, whichever comes first. For example, a player on a non-guaranteed rookie minimum deal who sustained a season-ending ACL tear would be owed his full $1,272,870 salary.

If the injured player’s contract includes Exhibit 9 language, however, his team could waive him and only be on the hook for a one-time payment of $15K. That amount increased from $6K when the NBA completed its latest Collective Bargaining Agreement.

An Exhibit 9 deal, which is non-guaranteed and doesn’t count against the salary cap until the start of the regular season, can only be a one-year, minimum-salary contract. A team can carry up to six players on Exhibit 9 deals, but can’t sign a player to such a contract unless it has at least 14 players already under contract (not including two-way deals).

In most cases, if a team plans to have a player on a non-guaranteed contract participate in training camp and/or the preseason, his contract will include an Exhibit 9 clause in order to limit the club’s liability.

If a player signs a contract that includes Exhibit 10 language but not an Exhibit 9 clause, it’s usually a signal that he’s just being added for G League rights/bonus purposes and won’t actually be participating in training camp with his team. Conversely, an Exhibit 9 contract that doesn’t include Exhibit 10 language suggests the player will probably be taking part in camp but may not be a candidate to join his team’s G League affiliate if he’s waived.

So far this offseason, we’ve confirmed the contract details on a dozen Exhibit 10 contracts that have been officially signed and all 12 of them also include an Exhibit 9 clause. At least one contract – the Suns‘ deal with Jared Butler – is an Exhibit 9, but not an Exhibit 10.

An Exhibit 9 contract that also includes Exhibit 10 language can be converted into a two-way deal. In that scenario, the Exhibit 9 clause would become null and void, so the team would no longer have injury protection.

In the event that a player with Exhibit 9 language in his contract makes his team’s regular season roster, his deal would be converted to a standard non-guaranteed contract. The Exhibit 9 protection wouldn’t carry over into the regular season.

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.

Earlier version of this article were published in 2014 and 2023.

The NBA’s salary cap primarily serves as a way to restrict the amount a team can invest in player salaries in a given year. However, because the league has a soft cap rather than a hard cap, there’s technically no specific figure that clubs are prohibited from exceeding once they go over the cap to re-sign players. As long as a team doesn’t use certain exceptions or acquire a player via sign-and-trade, that team doesn’t face a hard cap.

There is, however, a specific threshold on the lower end that teams must meet in each NBA season. The league’s minimum salary floor requires a club to spend at least 90% of the salary cap on player salaries. For instance, with the 2025/26 cap set at $154,647,000, the salary floor for this season is $139,182,000.

For the purposes of calculating whether a team has reached the minimum salary threshold, cap holds and international buyouts aren’t considered, but players who suffered career-ending injuries or illnesses are included in the count, even if they’ve since been removed from the club’s cap.

Under the NBA’s previous Collective Bargaining Agreement, the penalties levied against a team whose salary was below the minimum floor at the end of the season weren’t very harsh — the franchise was simply required to make up the shortfall by paying the difference to its players.

However, the current Collective Bargaining Agreement has made those penalties for teams below the minimum salary floor significantly more punitive.

A team is now required to reach the minimum salary floor by the start of the regular season, rather than the end of the regular season. A team whose salary is below the minimum floor at the start of the regular season won’t receive a share of the end-of-season luxury tax payouts.

Additionally, a team whose salary is below the minimum floor at the start of the season will have a cap hold added to its salary in order to reach the minimum floor. For instance, a team with a $134,182,000 salary on opening night in 2025/26 would have a $5MM cap hold added to its salary to reach the $139,182,000 floor and would be unable to immediately access that $5MM of cap room (that “frozen” room could eventually be unfrozen if the team increases its salary above the minimum floor).

At the start of the regular season, a team is assigned an “MTS threshold” figure, which is the lesser of the minimum salary floor or the team’s salary as of opening night. A team that dips below its “MTS threshold” at any time during the regular season would have until the end of the next day to get back above that threshold.

This happened to the Pistons during the 2024/25 season — they briefly dropped below the minimum salary floor when they waived Paul Reed‘s partially guaranteed $8MM contract in December and were required to get back above the floor by the end of the next day. They did so by signing Javante McCoy to a contract worth well above his minimum a little over 24 hours later.

A team that begins the season below the floor cannot reduce the shortfall amount it pays the NBA by spending on player salaries during the season. For example, a team that starts the season $5MM below the floor would pay the league $5MM at that time and wouldn’t recoup that money even if it moves above the floor during the season.

However, if that team’s salary ends up more than $5MM below the floor by the end of the season (ie. as a result of likely incentives not being earned), the club would owe the league an additional payment on top of that initial $5MM.

While the previous CBA called for a team that finished the season below the floor to pay the shortfall to its own players, the shortfall money is now sent to the NBA, which then redirects it to all players. That shortfall money will generally be disbursed to each player in the league in proportion to his salary for that season.

Based on the changes in the current CBA, it’s unlikely that we’ll see any team open a regular season below the minimum salary floor anytime soon — all of the incentives that teams had to remain below the floor into the season have been eliminated. A team operating below the floor on opening night wouldn’t be able to access all of its cap room, would forfeit an end-of-season tax payment, and wouldn’t even be able to award its shortfall amount exclusively to its own players.

The Nets are currently the only NBA team operating below the minimum salary floor for 2025/26 — it’s a safe bet they’ll rectify that sometime before the start of the season this October.

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. Information from ESPN’s Bobby Marks and Larry Coon’s Salary Cap FAQ was used in the creation of this post.

Earlier versions of this post were published in past years.