NBA Free Agent Glossary: What is the mid-level exception?

The mid-level exception is the best tool available to teams over the salary cap to add talent through free agency and trade. Exceptions, in NBA CBA jargon, are provisions that allow teams to spend beyond the salary cap.

The NBA has three mid-level exceptions available to teams based on their salary cap situation. These are a rough projection of the salary cap, luxury tax, and tax aprons going forward. 

Non-taxpayer mid-level salary exception

The best-known of the NBA’s mid-level exceptions is the non-taxpayer mid-level salary exception. The exception is available to teams above the salary cap but below the first apron. Teams can sign one or more free agents to deals up to four seasons and for a total first-year salary of up to 9.12 percent of the league salary cap in the first season.

The contracts can contain a maximum of five percent annual raises based on the first year's salary. Beginning this offseason, teams can use the non-taxpayer mid-level exception to acquire players via trade or a waiver claim. Here’s an example of the most a team can offer a player using the non-taxpayer mid-level salary exception on a four-year contract in the 2024 offseason. 

Taxpayer mid-level salary exception

The taxpayer mid-level salary exception is available to teams above the first apron but below the second apron. It’s similar to the non-taxpayer mid-level exception but prevents teams from offering as large or as long contracts. Contracts can not be longer than two years, or worth more than $5 million in the first season. In subsequent seasons, the max first-year salary will grow in accordance with the salary cap. 

Mid-level salary exception for room teams 

The final mid-level exception is the mid-level salary exception for room teams. This exception is allowable for teams operating under the salary cap. Contracts using the exception can be for up to three years and worth 5.678 percent of the salary cap. 

With the new CBA, teams above the second apron won’t have access to any mid-level exception. The mid-level exception is an invaluable roster-building tool for teams. It can help contenders add the final piece or pieces to their rotation, or allow up-and-coming teams to bring in a veteran to support their young core. While players on the mid-level aren’t stars, they can be the difference between a championship and an early exit.