Just like the NBA’s Collective Bargaining Agreement (CBA) has a maximum salary – i.e., the highest monetary amount a team can offer a player – it also has a minimum salary.
The minimum salary is in place in order to protect all players (especially veterans, who are rewarded with higher values on their minimum deals depending on their years of service in the league), providing them with an absolute floor amount for what they will earn from teams interested in signing them.
Here is how the numbers break down according to years of experience:
Unlike maximum salaries, which are calculated as a percentage of the overall salary cap (basically: 25 percent for players with six or fewer years of experience, 30 percent for players with between seven and nine years of experience and 35 percent for those re-signing with their current teams or for those with 10-plus years of experience), minimum salaries are already set by the CBA and aren’t dependent on the salary cap.
Minimum salaries also have a few unique rules to them. The following comes directly from the CBA:
Every Contract entered into between a player and Team that is intended to provide for Compensation equal to the Minimum Player Salary (with no bonuses of any kind) for each Season must contain the following sentence in Exhibit 1A of such Contract and shall be deemed amended in the manner described in such sentence: “This Contract is intended to provide for a Base Compensation for the ____________ Season(s) equal to the Minimum Player Salary for such Season(s) (with no bonuses of any kind)and shall be deemed amended to the extent necessary to so provide.” The reference in the preceding sentence to “no bonuses of any kind” shall not be construed to limit the ability of a Team and player (i) to agree upon provisions entitling a player to earn Compensation if such player’s Uniform Player Contract is traded to another NBA team
Basically, that means no minimum-contract players have the right to earn any type of bonus.
No 10-Day Contract or Rest-of-Season Contract (as those terms are defined in Sections 9 and 10 below) shall provide for a Salary of less than the Minimum Player Salary applicable to that player.
In laymen terms, even players who sign 10-days or rest-of-season deals late in the year can earn nothing less than the minimum. Obviously, that means on a per-game basis, though, and not total value of the contract. Players can sign up to two 10-day deals before teams either have to let them go or opt to sign them for the rest of the year.
Previously, minimum deals were the lowest-value contracts players could sign. Now, with the creation of two-way contracts, which allow teams to split a player’s time between the G League and the main club (for up to 45 days), that’s no longer the case. Two-way deals have a base worth of $77,250, but if a player sees NBA action, that number could increase to up to just north of $500,000, according to 2 Ways & 10 Days.
Finally, because minimum salaries for players with more experience are worth a higher monetary amount than those for players with less years of experience, the league directly pays teams the difference for anything above a minimum-level player with at least two years in the league (roughly just over $1.5 million) so that franchises don’t veer away from signing veterans just because they’re more expensive than young guys.