Orlando Magic

Are the Orlando Magic in the luxury tax in 2026-27?

Yes. The Magic owe an estimated $62.5M luxury-tax bill for 2026-27, sitting $24.0M into the tax.

This includes a projected signing that is not yet official, so these figures are an estimate.

Tax line

$200.4M

Tax payroll

$224.4M

Margin

-$24.0M

Tax bill

$62.5M

The tax line sits at $200.4M. The Magic's tax payroll (contracts plus dead money; cap holds don't count here) is $224.4M, which puts them $24.0M over.

The bill is charged in $6.1M bands above the line at rates that climb each bracket: $1.00 on the first band, $1.25 on the second band, $3.50 on the third band, $4.75 on the fourth band. That works out to about $62.5M. 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? →