Salary Cap

With the NBA’s salary cap set at $101,869,000 for the 2018/19 league year, the rookie scale has been set as well. The rookie scale locks in the value of contracts for first-round picks.

In every NBA league year, rookie scale amounts are assigned to each first-round slot, from No. 1 through No. 30. Teams can sign their first-rounders to as little as 80% of that rookie scale amount, or up to 120% of that figure. While that rule theoretically affords teams some flexibility, first-round picks virtually always sign contracts worth 120% of their rookie scale amount, and unsigned first-rounders have a cap hold worth 120% of their rookie scale amount.

Listed below, via Coon and RealGM, are the salary figures that represent 120% of the rookie scale amounts for 2018 first-round picks. Players will sign for these amounts unless they accept a deal worth less than the maximum allowable 120%. Rookie scale contracts are guaranteed for the first two years, with team options on the third and fourth years.

Here’s the 2018 breakdown:

While some NBA teams will head into free agency with more than enough cap room to add a maximum salary player, other clubs will be totally capped out. However, each of the NBA’s 30 clubs will be on common ground in one respect: No team will be ineligible to sign a player to a minimum salary contract.

Teams with cap room available will have a little more flexibility to sign players to longer-term minimum salary contracts, but over-the-cap clubs will still be able to use the minimum salary exception to add as many players as they want. Unlike other exceptions, such as the mid-level or the bi-annual, the minimum salary exception can be used multiple times, for contracts of up to two years.

[RELATED: Values of 2018/19 mid-level, bi-annual exceptions]

Undrafted free agents and late second-round picks are often recipients of minimum salary contracts, but there are plenty of veterans who end up settling for the minimum too. Of course, because a player’s minimum salary is determined by how much NBA experience he has, many veterans will earn more than twice as much money as a rookie will in 2018/19 on a minimum salary contract.

Listed below are 2018/19’s minimum salary figures, sorted by years of NBA experience. If a player spent any time on an NBA club’s active regular season roster in a given season, he earned one year of experience. So any player with zero years of experience has not yet made his NBA debut.

Here’s the full breakdown:

Because the NBA doesn’t want teams to avoid signing veteran players in favor of cheaper, younger players, the league reimburses clubs who sign veterans with three or more years of experience to one-year, minimum salary contracts. Those deals will only count against the cap – and against a team’s bank balance – for $1,512,601, the minimum salary for a player with two years of experience.

For instance, if David West – who has 15 years of NBA experience – signs a one-year, minimum salary contract with a new team, that team would only be charged $1,512,601 for West’s contract. He’d earn $2,393,887, but the NBA would make up the difference. This only applies to one-year contracts, rather than multiyear deals.

If a player signs a minimum salary contract after the regular season begins, he’ll earn a pro-rated portion of the amount listed above.

Players who are still on minimum-salary contracts that they signed in a previous season will have slightly higher minimum salaries than a player who signs a new contract this offseason. Those minimum salary figures are as follows:

These numbers would apply to a player like Heat shooting guard Rodney McGruder, who signed a three-year, minimum-salary contract in 2016. He now has two years of NBA experience, so his minimum salary for 2018/19 will be $1,544,951. If he had been waived and signed a new minimum deal for ’18/19, his salary would only be $1,512,601.

Now that the NBA has set its salary cap for the 2018/19 league year at $101,869,000, we have a clearer idea of what maximum-salary contracts will look like for the coming season.

While these numbers could soon be applied to contracts for free agents like LeBron James, Kevin Durant, Paul George, and Nikola Jokic, they’re also relevant for players who signed maximum-salary extensions last year, such as Russell Westbrook, Joel Embiid, and Andrew Wiggins.

Listed below are the maximum-salary contracts for players signing contracts that start in 2018/19. The first chart shows the maximum salaries for a player re-signing with his own team — a player’s previous team can offer five years instead of four, and 8% annual raises instead of 5% raises. The second chart shows the maximum salaries for a player signing with a new team.

A player’s maximum salary is generally determined by his years of NBA experience, so there’s a wide gap between potential earnings for younger and older players. In the charts below, the “6 years or less” column details the maximum contracts for players like Jokic and Wiggins; the “7-9 years” column applies to free agents like George and DeMarcus Cousins; and the “10+ years” column applies to vets like James and Chris Paul.

Here are the maximum salary figures for 2018/19:

A player re-signing with his own team (8% annual raises, up to five years):

A player signing with a new team (5% annual raises, up to four years):

The salary cap for the 2018/19 NBA league year has officially been set, with the league announcing that the cap will be $101,869,000.

Under the league’s current Collective Bargaining Agreement, the values of the mid-level, room, and bi-annual exceptions are tied to the percentage that the salary cap increases in a given year. The cap figure for 2018/19 represents approximately a 2.8% increase over last season’s $99,093,000, so other exceptions will increase by the same amount.

Listed below are the maximum annual and total values of each of these exceptions, along with a brief explanation of how they work and which teams will have access to them.

Mid-Level Exception (Non-Taxpayer):

The non-taxpayer mid-level exception is the primary tool available for over-the-cap teams to add free agents. As long as a team hasn’t dipped below the cap to use cap space and doesn’t go over the tax apron ($129.817MM) at all, it can use this MLE, which runs for up to four years with 5% annual raises.

Mid-Level Exception (Taxpayer):

If an over-the-cap team currently projects to be a taxpayer, or expects to move into tax territory later in the 2018/19 season, it will have access to this smaller mid-level exception for taxpaying teams. If a team uses more than $5.337MM of its mid-level exception, it is forbidden from surpassing the tax apron at any time during the league year. So even if a team isn’t above the apron when it uses its MLE, it might make sense to play it safe by avoiding using the full MLE and imposing a hard cap.

The taxpayer MLE can be used to sign a player for up to three years, with 5% annual raises.

Room Exception:

Although this is also a mid-level exception of sorts, it’s colloquially known as the “room” exception, since it’s only available to teams that have used cap room. If a club goes under the cap, it loses its full mid-level exception, but gets this smaller room exception, which allows the team to go over the cap to sign a player, once the team has used up all its cap space. It can be used to sign players for up to two years, with a 5% raise for the second season.

Bi-Annual Exception:

The bi-annual exception, as its name suggests, is only available to teams once every two years. Of the NBA’s 30 clubs, only three – the Pistons, Rockets, and Clippers – used it in 2017/18, so they won’t have access to it in 2018/19. The league’s other 27 teams could theoretically use it this season.

Still, even if a team didn’t use its BAE in ’17/18, that club doesn’t necessarily have access to it for the coming year. As is the case with the non-taxpayer MLE, this exception disappears once a team goes under the cap. It’s also not available to teams over the tax apron — using the BAE creates a hard cap at the apron.

The BAE can be used to sign players for up to two years, with a 5% raise after year one.

Note: Be sure to check out our Hoops Rumors Glossary installments for more information on the mid-level exception and the bi-annual exception.