Under the new Collective Bargaining Agreement (CBA), put together by the NBA and NBPA in July of 2023, players can extend their contract up to five (5) seasons (including any years remaining on their current contract). When it comes to the salary rules, the first year of the extension must be the higher of the two options:
- 140% of the salary on the last year of the player’s current contract OR
- 140% of the estimated average player salary for the salary cap year in which the extension starts (this is done by taking 104.5% of the prior year’s average player salary)
After the first year of the extension has been decided, the contract can have annual increases or decreases by no more than 8% of the first year of the extended salary. These increases or decreases do not compound each year. You take the percentage of the first-year salary and add that same amount to the subsequent years remaining on the contract.