CBA Glossary
Every salary cap term explained. Learn the language of NBA trades.
Contracts
No-Trade Clause
A contract provision giving a player the right to veto any trade. Available only to players with 8+ years of NBA service and 4+ years with their current team, on new free agent contracts (not extensions). Very rare in the NBA.
Rookie Scale
A predetermined salary schedule for first-round draft picks. Contracts are 4 years with the first 2 guaranteed. Years 3 and 4 are team options. The salary amount is based on draft position and increases annually.
Stretch Provision
A team can waive a player and spread the remaining guaranteed salary over twice the remaining contract length plus one year. For example, waiving a player with 1 year/$12M remaining spreads it to $4M/year for 3 years. This reduces the annual cap hit but extends the commitment.
Two-Way Contract
A special contract allowing a player to split time between the NBA and G League. Teams can have up to 3 two-way players. Two-way contracts don't count against the 15-player roster limit or the salary cap. Players on two-way contracts are ineligible for the playoffs unless converted to a standard contract.
Veteran Minimum
The minimum salary a team must pay a player, scaled by years of experience. For 2025-26, it ranges from $1,272,870 (rookies) to $3,634,153 (10+ years). Veterans on minimum contracts only count as $2,296,274 against the cap — the league covers the difference.
Draft
Stepien Rule
Named after Ted Stepien, former Cavs owner who traded away too many picks. Teams must retain at least one first-round pick in every other draft going forward. The pick doesn't have to be the team's own — an acquired pick satisfies the rule.
Exceptions
Bi-Annual Exception (BAE)
A cap exception worth $5,134,000 (2025-26) available every other year to teams below the first apron. Limited to 2-year contracts. Using it hard-caps the team at the first apron.
Non-Taxpayer Mid-Level Exception (NTMLE)
A cap exception worth $14,104,000 (2025-26) available to teams over the cap but below the first apron. Can sign players for up to 4 years. Using it hard-caps the team at the first apron.
Room Exception
Worth $8,781,000 (2025-26), available to teams that used cap room to sign players and are now over the cap. Can be used for up to 3-year contracts. Expanded from 2-year max under the 2023 CBA.
Taxpayer Mid-Level Exception (TPMLE)
A smaller cap exception worth $5,685,000 (2025-26) available to teams above the first apron but below the second. Limited to 2-year contracts. Teams above the second apron cannot use any MLE.
Fundamentals
Cap Hold
A placeholder amount charged against a team's cap for free agents whose rights they hold. Cap holds count toward team salary even though no contract exists. Teams must renounce a player's rights to remove the cap hold, but doing so means losing the ability to re-sign that player using Bird rights.
Cap Space / Cap Room
The difference between a team's current salary and the salary cap. Teams with cap space can sign free agents or absorb salary in trades without sending matching salary out.
Hard Cap
A strict salary limit that cannot be exceeded under any circumstances. Teams become hard-capped by certain actions: using the NTMLE (hard-capped at first apron), using the BAE (first apron), receiving a sign-and-trade (first apron), or aggregating salaries (second apron).
Luxury Tax
A dollar-for-dollar (or more) penalty paid by teams whose total salary exceeds the luxury tax line. For 2025-26, the tax line is $187,895,000. Tax rates increase with each bracket and are higher for repeat offenders.
Repeater Tax
Higher luxury tax rates that apply to teams who have paid the luxury tax in 3 of the previous 4 seasons. Repeater rates start at $3.00/dollar (vs $1.00 standard) and escalate much faster through the brackets.
Salary Cap
The maximum amount a team can spend on player salaries, set annually by the NBA based on Basketball Related Income (BRI). For 2025-26, the salary cap is $154,647,000. Unlike the NFL, the NBA's cap is a "soft cap" — teams can exceed it using various exceptions.
Player Rights
Bird Rights
Named after Larry Bird. A team that has had a player for 3+ consecutive seasons holds his "Bird rights," allowing them to exceed the salary cap to re-sign him. Full Bird rights enable 5-year max contracts with 8% raises. Bird rights transfer with a player when traded.
Early Bird Rights
After 2 consecutive seasons with a team, a player earns Early Bird rights. The team can offer up to 175% of his previous salary or 105% of the average salary, whichever is greater, on a 2-4 year deal with 8% raises, even if over the cap.
Non-Bird Rights
After 1 year with a team, a player has Non-Bird rights, allowing the team to re-sign him for up to 120% of his previous salary on a 1-4 year deal.
Roster
Roster Limits
NBA teams can carry up to 15 players on standard contracts plus up to 3 two-way contracts (18 total). The minimum is 14 on opening day and 13 during the season. If a team has fewer than 12 players, an incomplete roster charge is assessed for each missing spot.
Thresholds
First Apron
The first tax apron ($195,945,000 in 2025-26) restricts teams from using the non-taxpayer MLE, bi-annual exception, sign-and-trades to acquire players, and prior-year TPEs. Teams above the first apron can only take back 100% of outgoing salary in trades.
Luxury Tax Line
The salary threshold above which teams must pay the luxury tax. Set at $187,895,000 for 2025-26. Separate from the salary cap — a team can be over the cap without paying tax.
Salary Floor
The minimum amount a team must spend on player salaries, set at 90% of the salary cap ($139,182,000 for 2025-26). Teams below the floor must distribute the difference to their players.
Second Apron
The second tax apron ($207,824,000 in 2025-26) imposes the strictest restrictions. Teams above it cannot: aggregate salaries in trades, send cash in trades, use any MLE, send players via sign-and-trade, or trade first-round picks 7 years out. Their distant first-round picks are also "frozen."
Trade Rules
Aggregation
Combining multiple outgoing players' salaries to match a single incoming player. For example, trading two $10M players to acquire one $20M player. Teams above the second apron cannot aggregate. Aggregating salaries hard-caps the team at the second apron.
Base Year Compensation (BYC)
Applies in sign-and-trade deals where a player receives a raise of more than 20%. The player's trade value for salary matching purposes is the greater of 50% of the new salary or the previous salary — not the full new salary. This makes sign-and-trade deals harder to complete.
December 15 Rule
Free agents signed in the offseason to a new team cannot be traded until December 15 or 3 months after signing, whichever is later. This prevents teams from signing players solely to package them in trades.
Poison Pill Provision
Applies to rookie scale players who have signed extensions that haven't kicked in. The outgoing team counts the player at their current (low) salary, but the incoming team must count the player at the averaged salary across all remaining years including the extension — making these trades much harder to complete.
Salary Matching
When trading, teams over the salary cap must send out approximately equal salary to what they receive. The exact rules depend on the team's cap position: teams below the first apron use a tiered system (200%/$7.5M/125%), while teams above the aprons can only take back 100% of outgoing salary.
Sign-and-Trade
A transaction where a free agent signs a new contract with their current team and is immediately traded. Requires the player to have Bird or Early Bird rights. Under the 2023 CBA, contracts can be up to 4 years at 120% of previous salary. The receiving team becomes hard-capped at the first apron.
Traded Player Exception (TPE)
When a team trades a player and receives less salary in return, the difference creates a TPE. This exception can be used within one year to acquire another player without sending salary out. TPEs cannot be combined with other exceptions or traded to other teams.