This post was originally published on this site.
As of right now, 14 NBA teams are slated to pay the luxury tax for the 2025-26 season. While the tax in some form has existed since 2002, the modern, punitive tax model has been in place since 2011. Last year, 10 teams paid it, so based on current projections, we’re in line to shatter the post-2011 record. Does that mean we’re in some new era of extreme spending?
Of course not. Teams just haven’t dumped their bad contracts yet. Every year features significantly more teams above the tax line in January than in February because every February, a handful of teams find way to shed salary and get below the line. So we’re going to look at all 14 current luxury-tax teams and figure out who’s likely to duck the tax or one of the aprons, who has some significant incentive to do so, and then, which teams stand out as options to help them do so. We’ll go in order of 2025-26 payroll, starting with the league’s most expensive team and working our way down. Our numbers will come from Yossi Gozlan’s cap sheets.
But first, we should define our terms. Below is a quick overview of the four notable financial conditions teams may be looking to avoid:
- The luxury tax is a predetermined amount of team salary that, once passed, triggers a penalty that increases the further a team goes above that line. This year’s tax line is $187,895,000. The total luxury-tax payments made by each of the teams above the line is pooled, and up to half of that money is dispersed to teams that stayed below the line, incentivizing teams to do so by giving them a big cash payout.
- The repeater tax applies to teams that have been above the tax line for at least three of the previous four seasons, not including the current season. Those teams pay a substantially higher tax rate, especially as they go deeper into the tax. A team can effectively reset its repeater clock by spending two years below the tax line.
- The first apron is a predetermined amount of team salary that, once passed, triggers a set of roster-building restrictions. This year’s first apron is $195,945,000. Teams that are above the first apron cannot acquire more salary through a trade than they send out, use the non-taxpayer mid-level exception or bi-annual exception, acquire a player through a sign-and-trade or sign players who get bought out if that player’s previous salary exceeds the non-taxpayer mid-level exception. Any team that acquires a player through one of those means is hard-capped at the first apron, meaning they cannot exceed it for any reason.
- The second apron is a predetermined amount of team salary that, once passed, triggers a further set of roster-building restrictions in addition to the ones generated by the first apron. This year’s second apron is $207,824,000. Teams above the second apron cannot aggregate salary in trades or use the taxpayer mid-level exception. Doing either triggers a second-apron hard cap. In addition, if a team finishes a season above the second apron, its first-round pick eight years in the future is “frozen.” This means that it cannot be traded, and if the team spends at least two of the next four seasons above the second-apron line, that pick moves to No. 30 overall in the first round. If a team manages to stay below the second apron in at least three of the next four seasons, the pick is unfrozen and can be traded again.
- Status: Above the second apron; non-repeater
- Dollars above the luxury-tax line: $40,689,160
There’s no getting below the tax for Cleveland. In fact, it probably wouldn’t be feasible to shed even the $22 million it would take to get below the second apron without completely gutting the team. The Cavaliers knew what they were getting into when they built this roster. All that can really been done now, if Cleveland so chooses, is cut the bill. The Cavaliers are so far above the line that even a modest cap dump would be helpful in that respect. Lonzo Ball is making only $10 million this year, but if Cleveland managed to move him without taking money back, the savings would be in the neighborhood of $70 million just because such a deal would take the Cavaliers out of the deeper, more expensive tax brackets.
Still, that doesn’t mean we should necessarily expect Cleveland to cut costs. This is Cleveland’s first year in the tax with this core, so they have plenty of time to pivot before the repeater tax becomes a problem. They built this ultra-expensive roster in an effort to win the championship, so there’s a good chance they see this season through before reconsidering things over the summer. Dan Gilbert has historically been willing to pay significant tax bills for winners, though, so if the Cavaliers justify this expense on the court, he’ll keep writing checks off of it.
- Status: Above the first apron; non-repeater
- Dollars above the luxury-tax line: $19,780,641
The Knicks may look expensive, but they’ve planned their expenditures very carefully. They’re exactly where they planned to be coming into the season: right below the second apron for the second year in a row. New York’s salary sheet was built with a four-year run for this roster in mind, with the next two seasons being second-apron years before Karl-Anthony Towns‘ contract expires in 2028 and they potentially reset before a first-round pick drops to No. 30.
A potential pursuit of Giannis Antetokounmpo in the offseason may change their financial plans. Such a deal may require aggregation, which would trigger a second-apron hard cap. But either way, none of this means much at this year’s deadline. The Knicks aren’t shedding salary. They’ll likely try to combine Guerschon Yabusele and Pacôme Dadiet to land one last piece for their bench in the $7-8 million range, but otherwise, money isn’t much of a concern in New York right now.
- Status: Above the first apron; repeater
- Dollars above the luxury-tax line: $19,201,666
We have our first repeat payer, but the Warriors have been the NBA‘s most profligate team for basically a decade now. They’re not going to stop spending. They’re trying to add another impact piece around Stephen Curry in his golden years. That almost certainly means trading Jonathan Kuminga, but with very few mid-sized salaries to add and just $300,000 or so in room below their second-apron hard cap, making the money work on such a deal would be difficult. To pursue a max player like Anthony Davis, they’d have to include Draymond Green and multiple role players just to make the money work. Either way, this isn’t a “duck the tax” team. The Warriors want to get better.
- Status: Above the first apron; non-repeater
- Dollars above the luxury-tax line: $16,853,448
The Mavericks are so far above this year’s line that they’re almost certain to pay the tax. That would be their third season out of four above the line, setting them up to pay the repeater tax next year. Don’t worry, fiscally responsible Mavericks fans. That’s not going to happen. One of the benefits of building around teenagers is that they’re cheap. Cooper Flagg still has three years left on his rookie deal. That gives the Mavericks plenty of time to reset their repeater clock. An Anthony Davis trade, whether it comes now or over the summer, will almost certainly help them save money toward that effort. Daniel Gafford and Naji Marshall will command nice trade markets as well, and there are a number of mid-sized salaries here that could be moved fairly easily over the summer like Caleb Martin, Jaden Hardy and D’Angelo Russell. They’ll pay this year’s tax, but probably get back below the line for the next two seasons afterward to reset the repeater clock.
- Status: Above the first apron, non-repeater
- Dollars above the luxury-tax line: $14,685,977
Minnesota, like Golden State, is trying to improve. Where they differ, though, is that Minnesota already went above the second apron last season. That’s why Nickeil Alexander-Walker is no longer on the team. They had full Bird Rights and the ability to re-sign him, and they’re still two seasons away from the repeater tax. But they know they only have one more second apron available in the next four before a first-round pick drops to No. 30, and they decided not to use it this year. The Timberwolves aren’t going to duck this year’s tax, and they’re already below this year’s second apron.
But keep future salaries in mind as they seemingly pursue every big-name point guard on the market. They’re trying to be careful in regards to the second apron in future seasons. They’re roughly $24 million below next year’s projected second apron line before factoring in draft picks or filling out their roster. That means they’re either going to have to give up a core player to fit a big-name point guard in, or they’re looking for someone in the $20 million range rather than the $40-50 million range.
- Status: Above the first apron; repeater
- Dollars above the luxury-tax line: $12,086,488
Our first very interesting case. Boston shed salary left and right over the summer. Ostensibly, the purpose of doing so was getting below the second apron. The Celtics couldn’t abide a frozen draft pick for a season without Jayson Tatum, and they ultimately succeeded. But there was another purpose for Boston’s cost-cutting. If the Celtics had kept their roster together, they were staring down the barrel of a half-billion dollar payroll. Things aren’t quite as dire in the present, but the Celtics have paid the tax three years in a row, so they’re a repeat payer.
This Tatum-less season, therefore, gives them a golden opportunity to reset their tax clock. With less at stake this year, if they can just manage to get below the tax now and stay there through the end of next season, they’ll be able to spend with impunity afterward. That flexibility would be enormously valuable for Boston’s long-term prospects. They’re paying both Tatum and Jaylen Brown 35% super max contracts, and Derrick White isn’t cheap either. Breakout youngsters Jordan Walsh and Neemias Queta both expire after the 2026-27 season, and Payton Pritchard follows a year after that. Realistically, at least one pricey player who will be a part of Boston’s next core isn’t on the team yet. Boston’s best chance at paying everyone is resetting that repeater clock and limiting the tax payments that come from teams in 2028 and beyond.
This would have been an easy decision if the Celtics had taken the “gap year” route many expected. They haven’t. Boston is genuinely in the mix for the Eastern Conference crown even without Tatum (23-12, second in the East entering play on Wednesday). In a weak conference, there’s a realistic path to the Finals. Some lesser organizations might be desperate to take advantage of that path. These are the Celtics we’re talking about here. They measure themselves in terms of championships. Is this feel-good season more important to them than their long-term chances with a healthy Tatum down the line? Only they know the answer.
And of course… all of this assumes Boston can duck the tax. That’s no given. Not many teams are going to be eager to help a team as successful as Boston save $12 million on the fly. The obvious suspect here would be Utah given the team’s ties to the Ainge family, who now run the Jazz. Boston could theoretically swap Anfernee Simons to the Jazz for Jusuf Nurkić and then trade Sam Hauser directly into Utah’s $18 million John Collins trade exception. Doing so would probably cost multiple draft picks, let’s say Boston’s own first-rounder this year, which will be in the 20s, and New Orleans’ second-round pick, which will be in the high 30s.
Such a deal would get the Celtics far enough below this year’s tax to be active on the buyout market and set them up to enter next season roughly $30 million below the tax. That’s enough space to go find another big man or alter the roster in other meaningful ways. It would also turn two important reserves on this year’s team into one less valuable backup center, though that is a need area. Maybe Boston assumes Tatum’s return could make up for the losses of Simons and Hauser. Maybe not. The Celtics could just as easily just bring Tatum back, or try to flip Simons into a pricey center at this year’s deadline and really go for it. We don’t know this team’s priorities, but if the price is right, it’s probably worth taking the long view even if it hurts this year’s team. The Celtics are presumably going to be good for several years. This isn’t their best chance, and stepping back now could help them keep the second Tatum-Brown window open longer.
- Status: Below the first apron; non-repeater
- Dollars above the luxury-tax line: $7,001,508
Philadelphia would probably love to duck the tax. Though they’re at the very beginning of their repeater clock, the max contracts owed to Joel Embiid and Paul George give them no easy reprieve in the coming years and a new deal for Quentin Grimes this offseason won’t be cheap either. Throw in a possible supermax extension for Tyrese Maxey looming in the next few years and this team may be paying the tax for awhile.
Here’s the problem: Philadelphia has six players making more than the $7 million or so they are above the tax line, and all of them are important. Embiid and George are basically impossible to trade at their current salaries. Maxey and VJ Edgecombe are franchise players. Grimes is a critical supporting piece. That leaves Kelly Oubre Jr., who’s seemingly found a home in Philadelphia and been a valuable supporting player at below-market rate. Ownership would have to force the front office to dump him for such a trade to come.
Daryl Morey is adept at doing the luxury-tax dance. Maybe he can get off of Andre Drummond‘s $5 million, dump a few minimum salaries, and then skirt the line with 10-days and prorated minimums filling out the roster. But that would be tricky with a $7 million gap. Getting below the line wouldn’t be impossible, but don’t consider it especially likely.
- Status: Below first apron; repeater
- Dollars above the luxury-tax line: $6,940,806
It’s the Mark Walter era, baby! Money is meaningless! The Lakers can spend into eternity! Well, kind of. The team likely won’t be overly concerned with hefty tax bills, and will surely see no need to get below this year’s line, but there are still basketball concerns here. The Lakers are planning for cap space in either 2026 or 2027. That means they’re not taking on any long-term money unless it’s for a true difference-maker.
One of the benefits of cap space, though, is that is almost always mean ducking the tax and resetting your repeater tax clock. It is technically possible to pay the tax and use cap space in the same season. The Cavaliers did it in 2015, their first-year with LeBron James back, but that took a series of complicated step-ladder salary additions through trades that the Lakers are unlikely to replicate. If they pay the tax next season, it will be because they use the low cap hold assigned to Austin Reaves to add a bunch of talent and then re-sign him at or close to the max afterward. Possible? Sure, but if the Lakers want to duck next year’s tax, doing so is well within their power, and then it only takes one more year to reset the repeater clock entirely. That doesn’t necessarily matter under Walter, but hey, we’re thorough here.
- Status: Below first apron; non-repeater
- Dollars above the luxury-tax line: $6,794,411
Here’s another very interesting case. The Rockets very easily could have avoided the tax this summer. A slightly lower offer to Dorian Finney-Smith, a slightly longer deal for Fred VanVleet, heck, the Clint Capela contract was a complete luxury. The Rockets are $6.8 million above the tax and Capela is making $6.7 million to essentially soak up regular-season minutes so that Steven Adams doesn’t have to. But they chose to go into the tax in order to give themselves the best chance possible to win a championship. With Kevin Durant incoming, that was an entirely defensible decision even in light of Houston’s longer-term ambitions. The Rockets should be good for a long time. They will therefore be expensive for a long time. Delaying the repeater clock certainly matters for them.
Two things have happened since the offseason. The first is that Fred VanVleet tore his ACL. The second is that the Rockets have played like a championship contender without him. That creates an interesting little dilemma: would it be worth trying to trade VanVleet, knowing he is unlikely to contribute to his season’s championship push, to both acquire someone they could use right now and duck the 2025 tax? That would be a pretty thin needle to thread. Maybe a deal for someone like Collin Sexton would’ve made sense a few months ago, but Reed Sheppard has claimed Houston’s only offense-first guard slot. Ime Udoka isn’t playing another small, iffy defender. Besides, VanVleet could be an important part of next year’s team.
There are other possible routes to tax-ducking if Houston wants to pursue them. Say the Rockets determine they have more than enough wing depth. Maybe there’s a trade involving Finney-Smith that gets them below the line. Something could be worked out with Chicago involving impending free agent Ayo Dosunmu to give Houston an extra usable guard. The Bulls badly need wing defenders, and the Rockets have draft picks to spare (though Dosunmu would only merit second-rounders).
Houston has a bit more wiggle room here than Boston does. Their tax fate isn’t a certainty. Right now, the Rockets are $17 million below the tax line for next season. They could feasibly dodge the tax depending on what they pay Tari Eason and who else they keep. Amen Thompson‘s rookie extension kicks in a year after that… right as VanVleet’s contract expires. The Rockets have options. They aren’t staving off an existing repeater penalty, they’re planning for a future one. That means they can be picky. It would be worth ducking the tax for the right deal, if only to avoid having to make a worse one later, but they could certainly justify paying the tax this season. It was their plan all along, so surely they’re prepared for the next few years.
- Status: Below first apron; repeater
- Dollars above the luxury-tax line: $6,772,025
Like the Lakers, the other Los Angeles team effectively operates with infinite cash. Steve Ballmer can pay whatever it takes to build a winner. The decision to let Paul George walk had more to do with the second apron and the roster-building limitations it created. The Clippers have largely been proven right on that front. They’re not too far above this year’s line, but there’s no great need for the Clippers to duck it. They’re set up to be a cap space team this offseason if they want to be, and then Kawhi Leonard and James Harden expire after that. The Clippers will reset most of their payroll in the coming years, and that will almost certainly include a repeater clock reset. There’s no great impetus to act now.
- Status: Below first apron; non-repeater
- Dollars above the luxury-tax line: $5,576,232
No team needs to duck the 2026 tax more than the Magic. This is a 20-17 team. Tyus Jones is making $7 million to be a sub-replacement-level backup point guard. Desmond Bane and Franz Wagner are both on rookie max extensions. Paolo Banchero‘s kicks in next season. Jalen Suggs isn’t far behind that trio contractually. And now, third-year guard Anthony Black is having a breakout season that should include a hefty extension this offseason. This team is young and has five very pricey young players, to say nothing of the role players behind them. Before even addressing the roster construction as a whole, there is just no justifiable excuse for the Magic to start their repeater clock this year. They’re about to spend years in tax hell.
The Magic have wisely locked several role players up to team-friendly long-term deals, but given the financial avalanche they’re facing, some of those players won’t be around for long. The injury-prone Jonathan Isaac hovers around $15 million per year. He has $8 million guaranteed for next year, but nothing after that. There’s a good chance he’s gone. Having both Goga Bitadze and Mo Wagner around as cheaper backup centers is nice, but Orlando will likely only be able to afford one of them moving forward.
Heck, it wouldn’t even be crazy for the Magic to pursue another superstar as a cost-cutting measure. Say they traded Paolo Banchero, Anthony Black and Goga Bitadze for Giannis Antetokounmpo this offseason. That would roughly be an even salary exchange for the 2026-27 season, but when Black’s rookie extension kicks in after that, the present Magic players would combine to be making far more. But this is fantasy basketball territory. For now, just assume the Magic will look for a way to get off of the Jones contract to avoid the tax. If it’s not Jones, Jett Howard is in a similar salary range and Orlando declined his fourth-year option.
- Status: Below the second apron; non-repeater
- Dollars above the luxury-tax line: $967,000
The last few teams are so close to the tax line that they’re all but certain to find a way to get below it. The Raptors would need to shed less than $1 million to do so, and a 20-15 Eastern Conference team has no business paying the tax anyway. Expect them to look into ways of trading someone deep on their bench like Garrett Temple or Jamison Battle to create the necessary savings knowing they can just fill that roster spot with a pro-rated minimum contract. If the Raptors make one of the many star trades they’ve been linked to, they could also try to use that deal to save a couple of bucks.
- Status: Below the first apron; repeater
- Dollars above the luxury-tax line: $402,059
Even as a repeater, Denver’s tax payment is minimal. Who cares about a $1.2 million bill? That isn’t the point for the Nuggets. Denver’s ownership, which tends to operate the team relatively cheaply, will likely be motivated to ensure the Nuggets receive a tax disbursement by getting below the line this year. That’s not a basketball matter. The Nuggets won’t be resetting their repeater clock. It’s actually the opposite. They’re going to be so prohibitively expensive next season that they’re going to want to stack every possible dollar in revenue this year while they can.
With just 11 players on next year’s roster, the Nuggets are right at the projected second-apron line. That doesn’t include impending restricted free agent Peyton Watson, who is having a breakout season and is too important to this year’s team to be traded preemptively. If Steve Ballmer or Joe Lacob owned the Nuggets, this wouldn’t be a conversation. There isn’t a basketball reason to let Watson go. Who cares about restrictions regarding external additions? The Nuggets have the best player in the world and a championship-ready roster right now. It may be decades before they’re this good again. Suck it up and pay the huge tax bill.
That just isn’t how this ownership group has tended to operate. On top of Watson, there’s even reasonable fear that they’ll let backup center Jonas Valančiūnas return to Europe rather than even going above the second-apron line next year. They let Kentavious Caldwell-Pope leave for nothing in 2024, after all. Hopefully the Nuggets surprise us. Their history in this regard isn’t especially encouraging.
For now, the expectation should be that Denver attaches its 2032 second-round pick to either Hunter Tyson or Jalen Pickett in order to dump them and get below the tax line. The Nuggets could be active in the buyout market after that. In a perfect world they’d manage to dump Zeke Nnaji and his $8.2 million cap hit instead. He still has two more years left on his deal, and he never plays when the Nuggets are healthy. Maybe the minutes he’s racking up while the entire team is hurt entices someone, but that feels unlikely. If it helps keep Watson next season, though, it might be worth offering someone a first-round pick swap (they can do so in 2031) to take his deal.
- Status: Below first apron; repeater
- Dollars above the luxury-tax line: $273,668
Mat Ishbia paid over $150 million in luxury taxes last season. This year, he’s poised to duck the tax altogether. This one is pretty straightforward. The suns just need to find someone willing to take Nick Richards and send them back $4.7 million in salary or less. Richards is a playable center, so that’s achievable, but with Mark Williams, Oso Ighodaro and Khaman Maluach in Phoenix, he just isn’t part of their long-term plans.
Will the Suns be able to avoid the tax next year and reset their repeater clock? That’s a bit harder. Remember, they have almost $24 million in dead money squatting on their books (mostly owed to Bradley Beal, but don’t forget Nassir Little!), and they’re going to need to pay up to keep key free agents Mark Williams, Collin Gillespie and Jordan Goodwin. With only $22 million or so in luxury-tax room at the moment and just nine players locked up, they may have to move Grayson Allen or even Jalen Green to keep everyone else if they plan to stay below the tax. More likely, they just pay the tax next season and take things year-to-year after that.
Where are our dumping grounds?
Four teams control the market when it comes to cap dumps: the Nets, Jazz, Hornets and Wizards. Brooklyn has around $15.3 million in cap space to work with. The Jazz have an $18.4 million trade exception left over from their John Collins deal over the summer, so they can take in anyone making that much or less. The Hornets have their full $14.1 million non-taxpayer mid-level exception to spend. The Wizards have a $13.4 million trade exception left over from Kelly Olynyk, but they also have $64 million in easily movable expiring contracts in C.J. McCollum and Khris Middleton. That makes them an ideal trading partner for anyone looking to save money next season.
The Pistons have a $14.1 million trade exception at their disposal thanks to their Dennis Schröder trade over the summer. They could theoretically use that to take in someone’s bad contract, but they have the No. 1 seed in the Eastern Conference. It’s far likelier that they add a player who helps them win. Of course, it’s possible that they manage to do both.
There are a handful of sizable trade exceptions floating around the league otherwise, but most are attached to teams that can’t practically use them. The biggest active trade exception right now belongs to the Celtics. It’s over $22 million from the Kristaps Porziņģis deal, but as we covered, the Celtics are already miles beyond the tax. As a general rule, teams don’t go above the luxury tax to facilitate cap dumps.
However, teams without a specific competitive motivation can be fairly accommodating so long as they remain below the tax. Almost every team in the league has a trade exception of some size. That means that teams just looking to dump minimum contracts are usually able to do so for a reasonable price, so congratulations to the Nuggets and Raptors for their fairly straightforward upcoming cap dumps.
Ultimately though, almost any cap dump is feasible for the right price. We covered 14 tax teams, and there are other teams with longer-term concerns they’d like to address at this deadline. Comparatively, there are only four teams we can say comfortably will be receptive to big cap dumps, with a fifth potentially lurking. In other words, it’s a seller’s market when it comes to cap flexibility. If you want the Nets, Pistons, Hornets or Wizards to save you money, you’re probably going to have to pay them with meaningful draft pick compensation.