Houston Rockets

Are the Houston Rockets in the luxury tax in 2026-27?

Yes. The Rockets owe an estimated $2.6M luxury-tax bill for 2026-27, sitting $2.6M into the tax.

Tax line

$200.4M

Tax payroll

$203.0M

Margin

-$2.6M

Tax bill

$2.6M

The tax line sits at $200.4M. The Rockets' tax payroll (contracts plus dead money; cap holds don't count here) is $203.0M, which puts them $2.6M over.

The bill is charged in $6.1M bands above the line at rates that climb each bracket: $1.00 on the first band. That works out to about $2.6M. The basketball penalties (lost exceptions, trade restrictions) start at the aprons above the tax line.

The rule behind this

The luxury tax is a financial penalty line above the salary cap. Teams whose payroll (contracts, dead money, and drafted rookies booked as signed; free-agent holds don't count here) exceeds it pay a tax on the overage, at rates that escalate in brackets the deeper a team goes.

What is the luxury tax? →What is the repeater tax? →What is the first apron? →