Teams generally prefer to stay under the NBA’s luxury tax threshold ($187,895,000) unless they’re a championship contender.

Some may have begun rebuilding (or aren’t as good as they had hoped), but still have large contracts on the books that will soon expire.

As the February 6 trade deadline approaches, some franchises will likely make cost-cutting moves to lower their luxury-tax bill or get under the threshold altogether. Others may turn away trade opportunities that push their team’s payroll over the tax threshold.

Tax is calculated based on a team’s roster as of the last day of the regular season. The bill comes at the end of June, with half of the amount paid going to the NBA, in part to fund the NBA’s revenue-sharing program. The remaining half is sent in equal shares to the teams below the luxury tax line.

The following shows how close each team is to the luxury tax line, and if it is exceeded, what they project to pay in penalties. Check back, as playoff incentives or late-executed trades (triggering any trade kickers) may swing the balance up until the final day of the postseason.

Under Tax

  1. Atlanta Hawks: $186,070,502 (-$1,824,498)
  2. Boston Celtics $187,052,708 (-$842,292)
  3. Brooklyn Nets: $150,356,064 (-$37,538,936)
  4. Charlotte Hornets: $182,490,544 (-$5,404,456)
  5. Chicago Bulls: $182,833,631 (-$5,061,369)
  6. Dallas Mavericks: $182,455,744 (-5,439,256)
  7. Denver Nuggets (R): $186,075,382 (-$1,819,618)
  8. Detroit Pistons: $182,338,865 (-$5,556,135)
  9. Indiana Pacers: $187,158,346 (-$736,654)
  10. Memphis Grizzlies: $156,106,520 (-$31,788,480)
  11. Miami Heat: $186,288,637 (-$1,606,363)
  12. Milwaukee Bucks (R): $180,753,171 (-$7,141,829)
  13. New Orleans Pelicans: $186,891,963 (-$1,003,037)
  14. Oklahoma City Thunder: $186,877,564 (-$1,017,436)
  15. Orlando Magic: $187,342,232 (-$552,768)
  16. Philadelphia 76ers: $186,318,636 (-$1,576,364)
  17. Phoenix Suns: $185,446,906 (-$2,448,094)
  18. Portland Trail Blazers: $186,503,549 (-$1,391,451)
  19. Sacramento Kings: $186,840,188 (-$1,054,812)
  20. San Antonio Spurs: $182,264,835 (-$5,630,165)
  21. Toronto Raptors: $186,996,695 (-$898,305)
  22. Utah Jazz: $172,310,700 (-$15,584,300)
  23. Washington Wizards: $182,817,329 (-$5,077,671)

Taxpayers

  1. Cleveland Cavaliers: $211,540,273 ($23,645,273), $64,445,183 penalty
  2. Golden State Warriors (R): $204,744,987 ($16,849,987), $65,671,178 penalty
  3. Houston Rockets: $194,689,411 ($6,794,411), $7,071,764 penalty
  4. LA Clippers (R): $188,796,810 ($901,810), $2,705,430 penalty
  5. Los Angeles Lakers (R): $195,302,470 ($7,407,470), $22,653,028 penalty
  6. Minnesota Timberwolves: $192,648,763 ($4,753,763), $4,753,763 penalty
  7. New York Knicks: $206,644,608 ($18,749,608), $40,738,138 penalty

Note: The final numbers may differ slightly (+/- $3.00) based on rounding. Repeat-eligible taxpayers are indicated with “(R).” Any set-off will be calculated at the end of the NBA year (June 30).

Totals

  • Total taxable payroll: $5,574,958,033
  • Seven taxpayers: $208,038,484 penalty
  • $104,019,242 kickback for 23 under tax: $4,522,576

Email Eric Pincus at eric.pincus@gmail.com and follow him on Twitter @EricPincus.

(Updated on 2/8/26)