Hoops Rumors Originals

There are many NBA players technically on maximum-salary contracts, but most of those players didn’t earn identical salaries this season, making the league’s “maximum salary” something of a misnomer. While each NBA player has a maximum salary that he can earn in a given season, that number varies from player to player, with a handful of factors playing a part in determining the exact figure.

The primary factor in determining a player’s maximum salary is his years of service. If a player has been in the NBA for six seasons or fewer, he can earn up to 25% of the salary cap in the first year of his deal. Players with seven to nine years of experience can earn up to 30%, while veterans with 10 or more years in the NBA are eligible for up to 35% of the cap. In 2023/24, the salary cap was $136,021,000, meaning the maximum salaries are as follows:

The figures above explain why Fred VanVleet, who signed a maximum-salary contract with the Rockets last July following his seventh NBA season, earned a salary of $40,806,300 this season. But they don’t explain why Timberwolves big man Karl-Anthony Towns, who was also in that 7-9 year window and is on a max contract of his own, made just $36,016,200.

The reason Towns’ maximum salary is a few million shy of VanVleet’s is that those league-wide maximum salary figures only apply to the first year of a multiyear contract.

When a player signs a maximum contract, he can receive annual raises of up to either 8% or 5%, depending on whether he signs with his previous team or a new team. So by the third, fourth, or fifth year of his contract, he could be earning significantly more or less than his updated max for that season, depending on the rate the salary cap has been increasing and whether or not he has moved into a new “years of service” group.

Towns signed his first maximum-salary contract extension in 2018 and it went into effect in 2019/20, when he had fewer than six years of NBA experience. Although he has received annual 8% raises since then, those raises haven’t been enough to keep up with the annual cap growth and with his move into the 7-9 year window. As a result, he earned about $4.8MM less than his actual max in 2023/24, despite being on a “max contract.”

Towns signed a new contract extension in 2022 that will go into effect in 2024/25, so he’ll receive a major pay bump heading into next season and will comfortably surpass VanVleet’s annual earnings at that time.

Here are a couple more ways a player’s usual maximum salary can fluctuate:

• A free agent’s maximum salary is always at least 105% of his previous salary. For example, Lakers star LeBron James earned $47,607,350 this past season. If he were to decline his player option for 2024/25 in order to sign a new contract, he’d be eligible to receive a starting salary of up to $49,987,718 (105% of this year’s salary), even though that figure projects to exceed 35% of the ’24/25 cap ($49,350,000).
• In certain situations, players eligible for new contracts can earn the maximum salary for the level above the one they’d typically fall into. A player coming off his rookie scale contract can earn up to 30% of the cap instead of 25% if he meets certain performance criteria. A veteran can become eligible to earn up to 35% of the cap instead of 30% if he meets the same criteria, which are related to MVP, Defensive Player of the Year, or All-NBA honors.

Because a player can receive a raise of up to 40% in the first year of a veteran extension, there are some instances when a player who signs an extension not necessarily designed to be a maximum-salary contract sees the first-year salary in his new deal adjusted downward based on that year’s cap. Clippers forward Kawhi Leonard is one example. His new extension, which will begin in 2024/25, calls for a first-year salary of $52,368,085, which is a raise in the neighborhood of 15% on this season’s $45,640,084 salary.

However, because next year’s league-wide maximum salary for players with 10+ years of NBA experience projects to be $49,350,000 (which would be more than a 5% raise for Leonard), he can’t exceed that figure. That $49.35MM figure will be the value of his 2024/25 salary if the cap comes in at $141MM, as estimated. And Kawhi’s three-year extension, which was originally said to be worth over $152MM, will actually end up closer to $149MM.

A player who signs a maximum-salary contract can receive a trade kicker as part of his deal, but he can’t cash in on that bonus for any amount beyond his maximum salary in a given league year. For instance, Trae Young‘s max-salary contract with the Hawks features a 15% trade kicker, but if he had been traded this season, he wouldn’t have been eligible to receive that bonus, since he was already earning his maximum salary of $40,064,220.

A player on a maximum-salary deal that includes a trade kicker can potentially cash in on that bonus if he’s dealt later in that contract. For example, Brandon Ingram is on a max contract, but – like Towns – was earning well below his actual max in 2023/24, year four of that five-year deal. If he had been moved by the Pelicans this season, he would’ve been eligible to take advantage of his trade kicker. That remains true for Ingram going forward.

A maximum-salary player whose team finishes the season below the minimum salary floor isn’t eligible to receive a share when the team distributes that money to its players, since his max salary for that year can’t be exceeded.

The current figures for maximum salaries in 2024/25 are as follows, based on the NBA’s projection of a $141MM salary cap:

These figures will apply to players who previously signed maximum salary extensions that will go into effect in ’24/25, including Towns, Devin Booker, Anthony Edwards, Tyrese Haliburton, LaMelo Ball, and Jaylen Brown.

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 previously published by Luke Adams and Chuck Myron.

The minimum salary exception is something of a last resort for capped-out teams looking to add players, as well as for players seeking NBA contracts, but it’s one of the most commonly used cap exceptions.

As its name suggests, the minimum salary exception allows an over-the-cap team to sign a player to a minimum-salary deal. A contract signed using the minimum salary exception can be a one- or two-year deal, but can’t cover more than two seasons.

Teams can use the exception multiple times in a league year, giving clubs that have used all of their cap room and other exceptions an avenue to fill out their rosters. The exception also accommodates teams’ acquisitions of minimum-salary players via trade, as 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 2023/24, a player with no prior NBA experience was eligible for a $1,119,563 minimum salary, while a player with 10 or more years of experience was eligible for $3,196,448.

[RELATED: NBA Minimum Salaries For 2023/24]

Under the NBA’s current Collective Bargaining Agreement, the minimum salary is adjusted each season to reflect the year-to-year salary cap change. If the cap increases by 5%, so will minimum salaries. If the cap doesn’t change from one season to the next, neither will minimum salaries.

Our minimum-salary estimates for 2024/25, based on a projected salary cap of $141MM, can be found right here.

There’s a wide disparity between the minimum salary for rookies and for long-tenured players, with a minimum-salary veteran of 10+ seasons earning nearly 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 example, when the Bucks signed 11-year veteran Jae Crowder to a one-year pact for 2023/24 using the minimum salary exception, he locked in a salary of $3,196,448, but the team’s cap hit was just $2,019,706, equivalent to the minimum salary for a player with two years of NBA experience. The league will reimburse the Bucks for the difference between Crowder’s salary and cap hit ($1,176,742).

Many salary cap exceptions can only be used once each season. 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 league year. 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 Suns, for instance, used the minimum salary exception to sign Eric Gordon, Damion Lee, Keita Bates-Diop, Drew Eubanks, Chimezie Metu, Bol Bol, and Yuta Watanabe last offseason. They also used it during the season to add Thaddeus Young and Isaiah Thomas on rest-of-season contracts.

While many exceptions begin to prorate midway through the regular season, the minimum salary exception prorates beginning after opening night. If a season is 174 days long and a player signs a minimum-salary deal after 25 days have passed, he would only be paid for 149 days.

An extreme example of a prorated minimum salary occurred when the Clippers signed Kai Jones to a minimum-salary contract on the final day of the 2023/24 season. Last year’s rookie minimum for a player like Jones – with two years of NBA experience – was $2,019,706, so he received 1/174th of that amount: $11,608.

In cases where a veteran player signs a one-year contract using the minimum salary exception midway through a season, his cap hit is prorated in the same way that his salary is.

When Young signed with the Suns on February 20, 2024, there were 55 days left in the ’23/24 season. He earned a rest-of-season salary of $1,010,371 (55/174ths of his full-season minimum of $3,196,448), while his cap hit was $638,413 (55/174ths of $2,019,706, the minimum salary for a player with two years of experience).

When a player signs a two-year contract using the minimum salary exception, his second-year salary is locked in as part of that agreement. Depending on the amount of the second-year cap increase, he may end up making more or less than the amount he would have earned if he’d instead signed two consecutive one-year minimum contracts.

On a two-year, minimum-salary deal, the player’s second-year salary is worth 105% of the first-year minimum for a player with the same years of NBA experience.

For example, a rookie signing a two-year minimum-salary deal in 2023/24 would be assured of $1,891,857 in ’24/25, once he has one year of NBA experience under his belt — that’s 5% more than the minimum for a player with one year of NBA experience in ’23/24 ($1,801,769).

Finally, it’s worth noting that the minimum salary exception can be used to claim a player off waivers in the same way that it can be used to trade for a player. However, in the case of both trades and waiver claims, a minimum-salary player can’t be acquired using the minimum salary exception if his contract is for more than two years or if his salary exceeded the minimum in any previous year of the contract.

When the Wizards waived Isaiah Livers in April, he was earning a minimum salary for 2023/24 ($1,836,096). But Livers was in the third year of his contract and had earned more than the minimum in his first season of that deal — both of those factors made him ineligible to be claimed using the minimum salary exception, so if a team had wanted to claim him, it would have needed to use cap room or a trade exception.

Here are a few more notes on the minimum salary exception:

• Players signed using the minimum salary exception are eligible for trade bonuses, but not incentive bonuses. A minimum-salary player with a trade bonus cannot be acquired in a trade using the minimum salary exception unless he waives that bonus.
• When a minimum-salary player is traded during the season, any reimbursement from the NBA is split between his two teams. It’s prorated based on the number of days he spends with each club.
• If a minimum-salary player with a non-guaranteed salary is waived before he exceeds the minimum for a two-year veteran, his team won’t be reimbursed for any portion of his salary.
• Every 10-day contract is worth a prorated minimum salary. The NBA also reimburses teams for a portion of the 10-day minimum salary for veterans with three or more years of experience.

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 previous years by Luke Adams and Chuck Myron.

Players eligible for restricted free agency don’t become restricted free agents by default. In order to make a player a restricted free agent, a team must extend a qualifying offer to him — a player who doesn’t receive one becomes an unrestricted free agent instead.

The qualifying offer, which is essentially just a one-year contract offer, varies in amount depending on a player’s service time and previous contract status.

If a player reaches free agency with three or fewer years of NBA service time under his belt, his qualifying offer is worth whichever of the following amounts is greater:

• 135% of his prior salary; or 125% of his prior salary, if he signed his contract before the 2023/24 league year
• His minimum salary, plus $200K.

For instance, after earning $2,019,706 this season, Spurs big man Sandro Mamukelashvili projects to have a minimum salary worth $2,168,944 in 2024/25. Adding $200K to that figure works out to $2,368,944, whereas 135% of his prior salary is $2,726,603. His qualifying offer will be worth the greater amount ($2,726,603).

Let’s use Lakers guard Max Christie as another example — he earned a $1,719,864 salary in 2023/24. Unlike Mamukelashvili, Christie signed his contract prior to this season, so to determine his qualifying offer, we’d start by calculating 125% of that amount, which works out to $2,149,830. On the other hand, his projected minimum salary ($2,093,637) plus $200K would be $2,293,637.

Christie’s projected minimum could vary a little depending on where exactly the 2024/25 salary cap ends up, but it’s a safe bet his QO will be determined based on that amount rather rather than the 125% figure.

The qualifying offer for a former first-round pick coming off his rookie scale contract is determined by his draft position. Under the previous CBA, the qualifying offer for a first overall pick was 130% of his fourth-year salary, while for a 30th overall pick it was 150% of his previous salary — QOs for the rest of the first-rounders fall somewhere in between. Those numbers will increase to 140% and 160%, respectively, under the new CBA, beginning when the 2023 draft class reaches restricted free agency in 2027.

The full first-round scale for the draft class of 2020, whose first-rounders will be hitting free agency this summer, can be found here, courtesy of RealGM.

A wrinkle in the Collective Bargaining Agreement complicates matters for some RFAs-to-be, since a player’s previous usage can impact the amount of his qualifying offer. Certain players who meet – or fail to meet – the “starter criteria,” which we break down in a separate glossary entry, become eligible for higher or lower qualifying offers. Here’s how the starter criteria affects QOs:

• A top-14 pick who does not meet the starter criteria will receive a same qualifying offer equal to 120% of the amount applicable to the 15th overall pick.
  • Note: In 2024, the value of this QO will be $7,744,600.
• A player picked between 10th and 30th who meets the starter criteria will receive a qualifying offer equal to 120% of the amount applicable to the ninth overall pick.
  • Note: In 2024, the value of this QO will be $8,486,620.
• A second-round pick or undrafted player who meets the starter criteria will receive a qualifying offer equal to 100% of the amount applicable to the 21st overall pick.
  • Note: In 2024, the value of this QO will be $5,216,324.

Pistons center James Wiseman is one example of a player who falls into the first group, since he didn’t meet the starter criteria this year. The No. 2 overall pick in 2020, Wiseman will be eligible this offseason for a QO worth $7,744,600 instead of $15,815,870.

Conversely, Raptors guard Immanuel Quickley (a former No. 25 overall pick) met the starter criteria and will now be eligible for a QO worth $8,486,620 instead of $6,128,004.

[RELATED: How Starter Criteria Will Impact QOs For Potential 2024 RFAs]

A qualifying offer is designed to give a player’s team the right of first refusal. Because the qualifying offer acts as the first formal contract offer a free agent receives, his team then receives the option to match any offer sheet the player signs with another club.

A player can also accept his qualifying offer, if he so chooses. He then plays the following season on a one-year contract worth the amount of the QO, and becomes an unrestricted free agent at season’s end, assuming he has at least four years of NBA experience. A player can go this route if he wants to hit unrestricted free agency as early as possible, or if he feels like the QO is the best offer he’ll receive. Accepting the qualifying offer also gives a player the right to veto trades for the season.

Hornets forward Miles Bridges was the most noteworthy restricted free agent to accept his qualifying offer during the 2023 offseason. As a result, he’ll be an unrestricted free agent in 2024.

Here are a few more details related to qualifying offers:

• A team that issues a qualifying offer can unilaterally withdraw that offer anytime up until July 13.
• A player who receives a qualifying offer has a deadline of October 1 to accept it. He and the team can agree to extend that deadline.
• A different set of rules applies to players coming off two-way contracts. For most of those players, the qualifying offer would be equivalent to a one-year, two-way salary, with a small portion (known as the “maximum two-way protection amount”) guaranteed. For 2024/25, that partial guarantee will be worth approximately $78K.
• A player who is coming off a two-year, two-way deal; has already been on two-way deals with his current team for at least two seasons; or has accumulated four years of NBA service would be eligible for a qualifying offer equivalent to a standard, minimum-salary NBA contract, with a small portion (known as the “two-way QO protection amount”) guaranteed. For 2024/25, that partial guarantee projects to be worth approximately $93K.

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 previous years.