2021/22 season to have the largest luxury tax bill in NBA history


In the NBA, teams are generally hesitant to spend enough salary to go deep into the luxury tax. The system is in place to support parity around the league. Essentially, the NBA charges the team a premium for going over the set salary cap.

This is especially true for the repeater tax system, which triggers a team in luxury three out of four seasons. This season, it appears teams aren’t shy and more than willing to pay the luxury tax to fill out their roster.

The 2021/22 NBA season will have the highest luxury tax bill in the league’s history, and it isn’t even close. Here’s a quick breakdown of how the luxury tax operates.

Teams must pay an extra:

  • $1.50 per $1 above the tax line, up to $5 million (incremental max: $7.5 million)
  • $1.75 from $5-10 million (incremental max: $8.75 million)
  • $2.50 from $10-15 million (incremental max: $12.5 million)
  • $3.25 from $15-20 million (incremental max: $16.25 million)
  • $3.75 from $20-25 million (incremental max: $18.75 million)
  • For every additional $5 million over the tax threshold is to be added 50 cents per dollar

Repeater tax:

  • $2.50 per $1 above the tax line, up to $5 million (incremental max: $12.5 million)
  • $2.75 from $5-10 million (incremental max: $13.75 million)
  • $3.50 from $10-15 million (incremental max: $17.5 million)
  • $4.25 from $15-20 million (incremental max: $21.25 million)
  • $4.75 from $20-25 million (incremental max: $23.75 million)
  • For every additional $5 million over the tax threshold is to be added 50 cents per dollar.

For repeat offenders, it’s easy to see how it can get expensive rather quickly.

Usual suspects

Feb 13, 2021; San Francisco, California, USA; Brooklyn Nets guard James Harden (13) talks with forward Kevin Durant (7) during a free throw attempt by the Nets against the Golden State Warriors in the third quarter at the Chase Center. Mandatory Credit: Cary Edmondson-USA TODAY Sports
Cary Edmondson-USA TODAY Sports

A total of ten teams will combine for $575,281,077 in luxury tax payments. This amount blows the previous record out of the water. Now, it’s easy to chalk this up to an ever-rising salary cap. However, the league set the previous record nearly twenty years ago.

In 2002/03, teams combined to pay $173,300,000 in tax payments. One team will surpass that record by themselves. The Golden State Warriors are on the hook for $184,067,457. Their huge tax bill is in large part a result of years of championship contention.

Their championship-winning core will cost them $102,000,000. Andrew Wiggins will cost them another $29,500,000. In total, they’re paying more in luxury tax payments than they are for their actual roster ($177,949,326).


To the surprise of no one, the Brooklyn Nets’ star-studded roster is near the top of the list. Brooklyn will pay $130,127,669 in luxury tax payments. That’s on top of their regular payroll of $175,677,936. However, since they are not in the repeater tax, they will pay $54 million less than the Warriors despite having a similar payroll. There’s a cost for multiple years of contention, and Golden State is paying it.


The LA Clippers and reigning champion Milwaukee Bucks round out the top four. The two teams will pay $92 million and $52 million in luxury tax payments, respectively. It’s a tough pill to swallow for the Clippers, who expect to miss Kawhi Leonard for most, if not all, of the season. On the other hand, Milwaukee should have no complaints as they attempt to defend their title. You can find a complete list of luxury tax payments here.

Ducking the tax

The final luxury tax bill isn’t calculated until the end of the season. Therefore, teams are still able to maneuver to avoid the luxury tax for this season. Non-tax paying teams will receive $11.9 million.

With the losses teams incurred due to the pandemic, saving that money could be a priority, especially for teams who don’t expect to contend this year.

The Toronto Raptors, Boston Celtics, and Portland Trailblazers are teams that one can expect to make this move. These three teams aren’t too deep into the tax and would look to avoid triggering the repeater tax in future seasons.

Still, even if we remove these teams, the total bill stands at $544,628,874.


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