League rules · NBA
NBA contract rules: what comes off the salary before tax
NBA caps agent commission at 4% and withholds 10% in escrow. On a $10M contract that is $400,000 plus $1,000,000 held in escrow, leaving $8,600,000 to be taxed. 30 clubs are modelled on this site.
The rules in force for 2026-27
The NBA withholds 10% of every salary in escrow under Article IV of the CBA. Agent commission is capped at 4% by the NBPA. The 2026-27 salary cap is $164.961M.
What the deductions cost at each contract size
| Contract | Agent fee (4%) | Escrow (10%) | Left to tax | Total held back |
|---|---|---|---|---|
| $1,000,000 | $40,000 | $100,000 | $860,000 | 14% |
| $5,000,000 | $200,000 | $500,000 | $4,300,000 | 14% |
| $10,000,000 | $400,000 | $1,000,000 | $8,600,000 | 14% |
| $25,000,000 | $1,000,000 | $2,500,000 | $21,500,000 | 14% |
These are the league-level deductions only. Income tax, social contributions and jock tax come off what remains — the NBA league page shows the after-tax result for every club.
Why the agent cap matters more than it looks
Agent commission is charged on gross salary, before tax, and it is not deductible. At 4% NBA is among the cheapest leagues for representation, which is why the same headline salary travels further here than in a 7% market like the IPL.
Escrow is different: it is withheld, then returned if league revenue meets projections. NBA holds 10% of every salary, so the $1,000,000 on a $10M deal is deferred rather than lost — but it is not available to the player during the season, and in a bad revenue year part of it is redistributed instead.
Compare against the other 14 leagues
Agent commission ranges from 3% in the NFL to 7% in the IPL. See every league side by side →
Where the club plays decides the tax bill: NBA take-home rankings for all 30 clubs →