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The most common tool over-the-cap teams use to sign free agents from other teams is the mid-level exception, 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.

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.

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 the BAE, along with all but the smallest version of the mid-level (the room exception). Additionally, teams lose access to the bi-annual exception when they go more than $6MM over the tax threshold, exceeding what’s known as the tax apron. So, only teams over the cap but under the tax apron can use the BAE.

If a team uses all or part of the bi-annual exception, it triggers a hard cap for that season. Clubs that sign a player using the BAE can later go under the cap, but can’t go over the tax apron at any time during the season once the contract is signed.

The bi-annual exception allows for a starting salary of up to $3.29MM in 2017/18. Under the NBA’s previous Collective Bargaining Agreement, the value of each season’s bi-annual exception was determined in advance. However, under the 2017 CBA, the value of the BAE in future league years will be tied to salary cap increases. If the cap goes up by 5%, the value of the bi-annual exception will also increase by 5%.

A player who signs a contract using the bi-annual exception is eligible for a one- or two-year deal, with a raise of 5% for the second season. For players who signed using the BAE in 2017/18, the maximum value of a two-year contract was $6,744,500. 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 starts to prorate on January 10, decreasing in value by 1/177th each day until the end of the regular season.

During the 2017/18 league year, the Clippers were ineligible to use the bi-annual exception, since they used it to sign Luc Mbah a Moute in 2016/17. Three teams have used the BAE this season, with the Grizzlies signing Tyreke Evans, the Rockets signing Tarik Black, and the Pistons signing Anthony Tolliver. Those three clubs won’t have the exception at their disposal during the 2018/19 league year.

Several teams, including the Spurs, Bucks, Pelicans, and Raptors, remain eligible to use the bi-annual exception this season, but if they don’t take advantage of that opportunity, they’ll retain their eligibility to use it in ’18/19.

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 2012, 2013, 2014, 2015, and 2016 by Luke Adams and Chuck Myron.

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:

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.

Players and teams have to meet certain criteria to earn Bird rights and Early Bird rights, but Non-Bird rights are something of 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. Teams can also claim Non-Bird rights on Early Bird free agents if they renounce them. The primary utility in doing so would be so that the team could sign the free agent to a one-year contract, 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 the previous salary was the minimum. In that case, the cap hold is equivalent to the two-year veteran’s minimum salary, which in 2018/19 will be $1,499,698.

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 isn’t enough to retain a well-regarded free agent. For instance, the Heat had Non-Bird rights for James Johnson and Dion Waiters this past summer, since those players had signed one-year deals with Miami in 2016.

The Heat technically would have been able to use Non-Bird rights to go over the cap to sign Johnson and Waiters, but because their 2016/17 salaries were only about $4MM and $3MM, respectively, the club’s ability to offer raises using the Non-Bird exception was extremely limited — 120% of Johnson’s previous salary was just $4.8MM, which wouldn’t have been a competitive offer. In order to get up to the $14MM and $11MM respective starting salaries that Johnson and Waiters received on their new contracts, Miami had to use cap space.

Holding Non-Bird rights on their top free agents didn’t help the Heat, but there are cases in which the exception proves useful. Nene, for example, signed a three-year, $10.95MM deal with the Rockets this offseason using his Non-Bird rights. Nene had initially signed a one-year, $2,898,000 contract with Houston in 2016, so the Non-Bird exception allowed the team to give him 120% of that amount ($3,477,600) in the first year of his new contract, without having to dip into the mid-level or bi-annual exception.

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 2012, 2013, 2014, and 2015 by Luke Adams and Chuck Myron.