CapmathCapmathHouston Rockets
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The tax line sits at $201.0M (projected), and the Rockets' tax payroll (contracts plus dead money; cap holds don't count) is $187.5M. They can add up to $13.5M in salary before paying tax.
Staying under the line also avoids repeater status, the higher rates charged to teams that pay tax in multiple recent seasons.
The rule behind this
The luxury tax is a financial penalty line above the salary cap. Teams whose payroll (contracts plus dead money; cap holds don't count here) exceeds it pay a tax on the overage, at rates that escalate in brackets the deeper a team goes.
More Rockets questions
Numbers come straight from the live Rockets cap sheet, recomputed whenever the data updates.