The mid-level exception (MLE) remains a key escape hatch for NBA clubs that have already pushed past the salary cap yet still want to add talent above the minimum salary. The collective bargaining agreement offers three distinct versions of the MLE, each tied to a team’s distance from the league’s tax lines, plus strict rules for clubs that exceed both tax aprons.
Full / Non-Taxpayer Mid-Level
• Available to teams over the cap but below the first tax apron.
• Covers up to four seasons.
• 2025-26 first-year salary: $14,104,000; four-year maximum: $60,647,200.
• Projected 2026-27 first-year salary: $15,139,000; four-year maximum: $65,097,700.
• Once triggered, the club may not cross the first apron (about $7 million above the tax line for 2025-26).
• Can also absorb a player via trade or waivers if the current-year salary fits inside the exception.
Room Exception
• Reserved for franchises that drop below the cap.
• Limited to three seasons.
• 2025-26 first-year salary: $8,781,000; three-year maximum: $27,660,150.
• Projected 2026-27 first-year salary: $9,425,000; three-year maximum: $29,688,750.
• Eligible for use in trades or waiver claims as long as the incoming player’s current salary fits.
Taxpayer Mid-Level
• Applies to teams that sit above the cap and the first tax apron but remain below the second apron.
• Runs a maximum of two seasons.
• 2025-26 first-year salary: $5,685,000; two-year maximum: $11,654,250.
• Projected 2026-27 first-year salary: $6,102,000; two-year maximum: $12,509,100.
• Once used, the organization cannot rise above the second apron (roughly $20 million over the tax line in 2025-26).
• Cannot be applied in trades or waiver claims.
No Exception Above Both Aprons
Teams that eclipse the second apron lose access to every form of the mid-level.
Shared Rules
Annual raises are capped at 5 percent of the first-year salary for any MLE contract. Only one version of the exception may be used in a given season, and bonuses are permitted as long as the total potential payout stays within the dollar limits listed above.
How Teams Deployed the MLE in 2025-26
• Detroit and Portland each spent the full $14,104,000 non-taxpayer MLE on Caris LeVert and Damian Lillard, respectively.
• Memphis used its entire $8,781,000 room exception to sign Ty Jerome.
• Golden State committed the full $5,685,000 taxpayer MLE to Al Horford.
• Dallas initially tapped the taxpayer slot for a two-year, $5,685,000-starting deal with D’Angelo Russell before sliding below the tax line later in the season.
Several clubs opted to divide the exception. Washington, for example, used the non-taxpayer MLE to bring in Russell ($5,685,000) while also signing Tristan Vukcevic ($2,857,143) and Jamir Watkins ($1,131,970), leaving a small remainder for future use.
Second-Round Picks and Two-Way Conversions
The arrival of a dedicated second-round pick exception under the current CBA has largely ended the practice of using MLE money on drafted rookies. Even so, seven players on two-way deals have been promoted to standard contracts in 2025-26 via the mid-level.
Saving a Slice for Later
Front offices increasingly bank some or all of the MLE for in-season moves. Because the non-taxpayer and room versions can now facilitate trades, an unused balance can prove valuable at the deadline, on the buyout market, or when locking up an emerging player.
Proration Rules
Unused MLE dollars begin to shrink on January 10. The reduction is retroactive to the day after the trade deadline and is calculated by dividing the leftover amount by the total number of regular-season days. For instance, a club holding $7 million on January 10 of a 174-day season would see that figure drop by $40,230 per day. The full $7 million remains available until the deadline passes; afterward, proration resumes.
Unlike the bi-annual exception, teams regain access to a fresh MLE every year they finish below the second apron. The dollar value rises or falls in lockstep with the salary cap—currently set at 9.12 percent of the cap for the non-taxpayer MLE and 5.678 percent for the room exception, rounded to the nearest thousand.
Source: Hoops Rumors
