Hoops Rumors Originals

An NBA team that want to re-sign a player before he reaches free agency can do so, but only at certain times and if his contract meets specific criteria.

Rookie scale extensions, which can be completed for former first-round picks between the third and fourth years of their rookie scale contracts, were the NBA’s most common form of extension in the past. But the league relaxed its criteria for veteran extensions in its 2017 Collective Bargaining Agreement and loosened them further in the 2023 CBA, resulting in a significant increase in those deals in recent years. They’ve now overtaken rookie scale extensions as the league’s most frequently signed extensions.

[RELATED: 2024/25 NBA Contract Extension Tracker]

A veteran extension is any contract extension that tacks additional years onto a contract that wasn’t a rookie scale deal. Even if the player is still on his first NBA contract, he can technically receive a “veteran” extension if he was initially signed as a second-round pick or an undrafted free agent rather than via the league’s rookie scale for first-rounders.

Here’s a full breakdown of how players become eligible to sign veteran extensions, and the limits that come along with them:

When can a player sign a veteran contract extension?

A team that wants to sign a player to a veteran extension wouldn’t be able to simply complete that extension one year after the initial contract was signed. The team must wait a specified period of time before the player becomes extension-eligible, as follows:

• If the player initially signed a three- or four-year contract: Second anniversary of signing date.
  • Note: The second anniversary date also applies if the player previously signed an extension that lengthened his contract to three or four total seasons.
• If the player initially signed a five- or six-year contract: Third anniversary of signing date.
  • Note: The third anniversary date also applies if the player previously signed an extension that lengthened his contract to five or six total seasons.
• If the player previously renegotiated his contract and increased his salary by more than 10%: Third anniversary of renegotiation date.

A contract that only covers one or two seasons is ineligible to be extended.

An extension-eligible player who is on an expiring contract can sign an extension at anytime between the start of the league year in July and the end of that league year on June 30. This rule also applies to a player who is in the final standard year of his contract, with a player or team option the following year, as long as that option is declined as part of the extension.

If an extension-eligible player still has more than one non-option year remaining on his contract, he can be extended between the start of the league year and the last day before the regular season tips off. He would be ineligible for an extension during the regular season and would regain his eligibility the following July.

It’s worth noting that an extension signed between October 2 and the start of the regular season is considered – for the purpose of determining its anniversary – to have been signed on October 1.

For example, having signed a four-year extension with the Nuggets on Oct. 21, a day before the 2024/25 regular season began, Aaron Gordon – who is now under contract for five total seasons – will become extension-eligible on Oct. 1, 2027, which is considered to be the three-year anniversary of his recently signed extension.

On the other hand, because he signed his most recent extension on Oct. 24, a couple days after the season tipped off, Timberwolves center Rudy Gobert – who is now under contract for four total seasons – will become eligible for his next extension on Oct. 24, 2026, the actual two-year anniversary of his latest deal.

How many years can a player receive on a veteran extension?

A veteran extension can be for up to five years, including the year(s) remaining on the previous contract. The current league year always counts as one of those five years, even if an extension is agreed to as late as June 30.

For instance, when Grayson Allen signed an extension in April with the Suns, he was in the final year of previous contract, which ran through 2023/24. He added four extra years via the extension, maxing out at five years overall. He wouldn’t be able to add a fifth year at that time even though the regular season was over, since the ’23/24 league year still counted toward the total.

If a player signs a “designated” veteran extension, he can receive up to six total years, as we cover in a separate glossary entry. Jaylen Brown got a super-max extension from the Celtics during the 2023 offseason, while his teammate Jayson Tatum was the only player to sign one in 2024.

How much money can a player receive on a veteran extension?

The first-year salary in a veteran extension can be worth up to 140% of the salary in the final year of the player’s previous contract or 140% of the NBA’s estimated average salary, whichever is greater. Annual raises are limited to 8% of the first-year extension salary.

When Jalen Brunson signed an extension with the Knicks during the 2024 offseason, he added four extra years to the one year and $24,960,001 remaining on his previous deal. Because his cap hit comfortably exceeds the league’s estimated average salary, Murray was eligible to earn up to 140% of his final-year salary in the first year of his extension. As such, his new contract begins in 2025/26 with a base salary of $34,944,001, with 8% annual raises from there.

In 2023/24, the NBA’s estimated average salary is $12,930,000, so a player earning less than that amount would be eligible to receive an extension worth up to 140% of that figure. That would work out to a starting salary of $18,102,000 and a four-year total of about $81MM. That’s the maximum deal that Thunder guard Alex Caruso is now eligible to sign.

A contract extension can’t exceed the maximum salary a player is eligible to earn, so there are some instances in which a player won’t be able to get a full 40% raise on a new extension.

For instance, Bam Adebayo‘s new three-year, maximum-salary extension with the Heat should technically award him up to a 40% raise on his $37,096,620 salary in 2025/26. However, that would work out to a $51,935,268 salary in 2026/27. Even if the salary cap increases by the maximum allowable 10% in each of the next two summers, Adebayo’s maximum allowable salary in ’26/27 would be $51,033,600 (30% of that’s season’s cap). So he won’t receive a full 40% raise on his new deal.

Because a player’s own personal maximum salary on an extension is always at least 5% of his salary in the previous season, there are scenarios in which a player could exceed the league-wide maximum salary.

That’s the case for Stephen Curry, who signed a one-year, $62,587,158 extension with the Warriors in August. That extension is for the 2026/27 season. Even if the cap increases by 10% in each of the next two years, the league-wide maximum for a player with 10-plus years of NBA experience in ’26/27 would be $59,539,200. However, Curry is allowed to exceed that figure because he’ll earn $59,606,817 in ’25/26 — his latest one-year extension represents a 5% raise.

Designated veteran extensions and renegotiated contracts have slightly different rules for salaries and raises than standard veteran extensions. You can read about those differences in our glossary entries on those subjects.

Can a player sign a veteran extension as part of a trade?

The NBA’s Collective Bargaining Agreement does allow for extend-and-trade transactions, but the rules governing them are more limiting than for standard veteran extensions.

A player eligible for an extension can sign one in conjunction with a trade, but he would be limited to four overall years and a starting salary worth 120% of the final-year salary on his previous deal (or 120% of the estimated average salary, for players earning below the average). Subsequent annual raises are limited to 5% as well.

A player who receives an extension that exceeds those extend-and-trade limits becomes ineligible to be traded for six months. Conversely, a player who is involved in a trade becomes ineligible to sign an extension for six months if the extension would exceed the extend-and-trade limits.

Gobert’s three-year extension with the Timberwolves is an example of a recent extension that didn’t exceed the extend-and-trade limits — he took a pay cut from $43,827,586 to $35MM in the first year of the extension and the deal lengthened his contract to four total years. Because that extension fell within the extend-and-trade parameters, Gobert could still technically be traded this season despite signing in October, though he almost certainly won’t be.

Conversely, since Adebayo’s new extension lengthens his total contract to five years and will feature raises exceeding 5%, he’s be ineligible to be traded until January 6, six months after he signed the deal.

Players who renegotiate their current-year salary as part of an extension can’t be traded for six months. This applies this season to Magic forward Jonathan Isaac, who becomes trade-eligible on January 6, and Jazz forward Lauri Markkanen, who won’t be trade-eligible during the regular season since he renegotiated his deal on August 7 — his trade restriction will lift on Feb. 7, one day after this season’s deadline.

An extension-eligible player can’t be extended-and-traded between the end of the season and June 30 if there’s a chance he could become a free agent that July. That rule applies to both veterans on expiring contracts and veterans with team or player options that have yet to be exercised.

What are the other rules related to veteran extensions?

There are many more minor rules and guidelines related to veteran extensions, including several involving bonuses and option years. A full breakdown can be found in Larry Coon’s CBA FAQ, but here are some of the notable ones most likely to come into play:

• A contract with an option can be extended if the player opts in or the team picks up the option.
• A contract with an option can also be extended if the option is declined, as long as the extension adds at least two new years to the deal. The only exception to this rule involves an early termination option — a contract with an ETO can’t be extended if the ETO is exercised, ending the contract early.
• A newly signed extension can contain a player or team option, but not an early termination option.
• If a contract contains incentive bonuses, a veteran extension must contain the same bonuses. The bonus amounts can be increased or decreased by up to 8%, but they must still be part of the deal. An extension also can’t contain bonuses that weren’t part of the original contract.
• If a contract includes an unearned trade bonus, it doesn’t necessarily have to be applied to the extension. If the team and player elect not to carry over the trade bonus to the extension and the player is dealt before the extension takes effect, the application of the bonus would ignore the extension.

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 CBA FAQ was used in the creation of this post.

Previous versions of this post were published in 2019, 2022, and 2023.