NBA’s Bi-Annual Exception: How It Works and Which Teams Used It in 2025/26
nba-bi-annual-exception-rules-2025-26-usage
For NBA franchises that sit above the salary cap but below the first tax apron, the bi-annual exception (BAE) offers a mid-tier spending option between the veteran minimum and the full mid-level exception. The mechanism can be applied to free-agent signings, trades or waiver claims, provided the player’s contract meets specific limits.
Core parameters
• A qualifying contract may run one or two years, with a second-year raise capped at 5%.
• The BAE’s first-year salary equals 3.32% of that season’s cap, rounded to the nearest thousand dollars.
• Once used, even partially, the exception becomes unavailable the following league year.
• Using any portion of the BAE hard-caps a club at the first apron for the remainder of that season.
Current dollar figures
• 2025/26 salary cap: $154,647,000
– BAE starting salary: $5,134,000
– Two-year maximum: $10,524,700
• 2026/27 cap projection: $166,000,000
– Projected BAE starting salary: $5,511,000
Eligibility requirements
• Teams operating with cap space forfeit the BAE.
• Clubs above the first tax apron—about $7 million over the tax line this season—cannot deploy the exception unless they first trim payroll below that threshold and stay there.
2025/26 teams barred from use
The Rockets and Clippers are ineligible this season after spending their BAE in 2024/25.
Clubs that exercised the BAE in 2025/26
Five organizations tapped the exception:
• Lakers – signed Marcus Smart
• Pistons – converted Daniss Jenkins from a two-way deal
• Hornets – traded for Malaki Branham
• Jazz – traded for Kevin Love
• Wizards – traded for Blake Wesley
Because they used the BAE this year, those five teams cannot access it during the 2026/27 campaign.
Additional notes
• The exception can be split among multiple players, though that rarely occurs because a divided BAE often falls below the veteran minimum.
• Beginning January 10 each season, the unused portion prorates by 1/174 per day. However, contracts signed between January 10 and the trade deadline are exempt from day-to-day proration; the reduction is applied retroactively after the deadline passes.
Source: Hoops Rumors
