NBA salary cap rules explained for 2022-23 season, luxury tax, players and contract details

Find out the NBA’s salary cap, luxury tax, free agency, maximum contract amount, bird rights and more explained for the 2022 season.

In this article, we will attempt to understand how the NBA salary cap works. NBA is an American sports league, which has a salary cap with the aim of making the league bigger, more balanced and competitive.

NBA salary cap rules explained for 2022-23 season, luxury tax, players, contract details

The NBA has a unique cap compared to other major leagues like MLB and NFL. The NBA offers a soft salary cap unlike the MLB and NFL with a hard cap. The soft cap allows NBA teams to have some exceptions in their cap.

What is the NBA salary cap and how does it work?

The cap is the limit of the total money that is given to each team, to prevent them from spending too much. Basically, each of the owners consists of a salary floor to spend a minimum figure to make their team balanced and competitive.

The fixed amount granted to each team is determined by the collective bargaining agreement (CBA) with the consent of the NBA franchises and the players’ association. Unlike other major leagues like MLB and NFL, the NBA has a soft cap, which means teams can have exceptions in their salary cap.

What if NBA teams go over the line?

NBA teams can only exceed the cap by using the “Larry Bird” exception. If any of the NBA teams exceeds the salary cap, the teams must pay the luxury tax.

NBA salary cap for 22-23: $123 million, a 10% increase over last year’s figures of $112 million.

2022-23 NBA Luxury Tax: $149 million

Maximum contract amount in the NBA

The value of the maximum contract amount offered to qualified players is determined by several factors, the number of years of experience of the player. For example, players with six years or less of league experience are allowed to sign the contract with a maximum value of 25% of the cap. If players have seven to nine years of league experience, they are allowed to sign a contract worth 30% of the cap. Or if the players have ten years of experience, they can sign a contract worth 35% of the cap.

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