Salary cap

The NBA salary cap is a soft cap: a league-wide limit on team salary, set each July as a share of league revenue. "Soft" means teams can and routinely do exceed it, but only through specific exceptions defined in the CBA (Bird rights, mid-level exceptions, minimum contracts).

A team's cap salary counts active contracts, dead money, and cap holds for its own free agents and unsigned draft picks. That is why a team can look tens of millions "over the cap" in July while its actual payroll is lower: holds are placeholders, not paychecks.

Going over the cap is normal. The meaningful spending lines above it are the luxury tax, the first apron, and the second apron. Each removes tools or adds cost.