The mid-level exception and bi-annual exception are the two key tools that an over-the-cap team typically has at its disposal to sign free agents from other clubs — or to re-sign one of its own free agents, if the player’s Bird rights aren’t available or aren’t sufficient.
The values of the mid-level, room, and bi-annual exceptions are tied to the salary cap and the percentage that it shifts in a given year. Here’s how that math works:
- Non-taxpayer mid-level exception: Worth 9.12% of salary cap.
- Taxpayer mid-level exception: Increases at the same rate as the salary cap.
- Room exception: Worth 5.678% of the salary cap.
- Bi-annual exception: Worth 3.32% of the salary cap.
As such, we don’t know yet exactly what those exceptions will be worth in 2025/26, but we can make an educated estimate. The NBA’s most recent projection for ’25/26 called for a cap of $154,647,000, which is the number we’ll use to project next season’s mid-level and bi-annual exceptions.
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Based on a $154,647,000 cap, here’s what the mid-level and bi-annual exceptions would look like in 2025/26:
Mid-Level Exception
| Year | Standard MLE |
Taxpayer MLE | Room MLE |
|---|---|---|---|
| 2025/26 | $14,104,000 | $5,685,000 | $8,781,000 |
| 2026/27 | $14,809,200 | $5,969,250 | $9,220,050 |
| 2027/28 | $15,514,400 | $9,659,100 | |
| 2028/29 | $16,219,600 | – | – |
| Total | $60,647,200 | $11,654,250 | $27,660,150 |
The standard mid-level exception is available to over-the-cap teams who haven’t dipped below the cap to use room and whose team salary remains below the first tax apron. It can run for up to four years, with 5% annual raises. Once a team uses the standard/non-taxpayer MLE, that team is hard-capped at the first tax apron for the rest of the league year.
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The taxpayer mid-level exception is for a team whose salary is between the first and second tax aprons, or teams who want the flexibility to surpass the first apron later. It can run for up to two years, with 5% annual raises. Once a team uses the taxpayer MLE, that team is hard-capped at the second tax apron for the rest of the league year.
The room exception is for teams who go under the cap and use their space. Once they’ve used all their cap room, they can use this version of the mid-level exception, which runs for up to three years with 5% annual raises.
Teams can use the non-taxpayer mid-level exception or the room exception – but not the taxpayer mid-level – to acquire a player via trade or waiver claim. The taxpayer MLE can only be used to sign players to new contracts.
Bi-Annual Exception
| Year | BAE Value |
|---|---|
| 2025/26 | $5,134,000 |
| 2026/27 | $5,390,700 |
| Total | $10,524,700 |
The bi-annual exception – which can be used for contracts up to two years, with a 5% raise after year one – is only available to teams that are over the cap and below the first tax apron.
It can also only be used once every two years, which will disqualify the Rockets and Clippers from using it in 2025/26, since Houston and Los Angeles have used their BAEs in 2024/25.