The salary cap is a big factor when NBA teams make decisions for their team before the season. Depending on their salary cap situation, teams can either decide to offload a bad contract, take on a bad contract for picks, splurge on free agency, or hand out contract extensions. In that regard, the salary cap dictates the game plan for teams in the offseason.
That means that any change in the salary cap can have major implications. Recently, NBA insider Shams Charania reported that the NBA's projected salary cap for the 2026-2027 season is now lower.
“The NBA has informed teams that the league is projecting a $165 million salary cap for 2026-27 — $1M lower than previous outlooks due to a reduction in local media revenue, sources tell ESPN,” Charania reported.
ClutchPoints' Brett Siegel reported the new important salary cap thresholds for the 2026-2027 NBA season. The salary cap is now at $165 million, as reported, and the rest of the cap numbers also went down by $1 million. The salary cap floor (the minimum) is at $147 million, while the luxury tax threshold is set at $201 million. The first and second tax aprons sit at $209 million and $222 million, respectively.
The NBA employs a “soft” salary cap. What that means is that while there's a declared salary cap for teams, teams are permitted to go over with some exceptions to keep players. The NBA also employs a luxury tax system, where teams that go over a certain threshold will pay more based on how much they went over the cap.
The first and second tax aprons are designed to limit NBA teams that are above the luxury tax threshold by a certain amount. Teams that are over the first tax apron have limitations in how they can use their mid-level exceptions and are restricted from making certain trades. The teams over the second apron have the same restrictions as the first apron, but face stiffer penalties. These luxury tax rules are designed to discourage bigger markets from spending more money than other smaller markets.
Teams that attempt to circumvent the NBA's salary cap rules will face stiff consequences. The Los Angeles Clippers are expected to face heavy penalties regarding their signing of Kawhi Leonard.
