Navigating the NBA's 2026-27 Mid-Level and Bi-Annual Exceptions

The 2026-27 NBA season features several salary cap exceptions, including the Mid-Level (MLE) and Bi-Annual (BAE) exceptions, which allow teams over the cap to sign free agents. Eligibility and usage depend on a team's total salary relative to the cap and luxury tax thresholds, each carrying distinct financial values and strategic consequences like hard caps.

Darius Tehrani

October 11, 2026 · 4 min read

For NBA teams looking to add talent, the salary cap often presents a significant barrier. However, the league’s Collective Bargaining Agreement provides several key tools, known as exceptions, that allow teams already over the cap to sign free agents. The most common of these are the Mid-Level Exception (MLE) and the Bi-Annual Exception (BAE). A team's eligibility for a specific version of these exceptions—each with different financial values and contract limitations—is dictated entirely by its total team salary relative to the salary cap and luxury tax thresholds.

For the 2026-27 NBA season, teams will navigate three distinct types of Mid-Level Exceptions: the Non-Taxpayer MLE, the Taxpayer MLE, and the Room MLE. The choice is not merely about how much money a team can offer a player; using certain exceptions triggers significant roster-building constraints, such as a "hard cap" that the team cannot exceed for the remainder of the season. Understanding which tool a team can use is essential to deciphering its offseason strategy.

The Non-Taxpayer Mid-Level Exception (NT-MLE)

The Non-Taxpayer Mid-Level Exception is the most powerful and flexible tool available to teams that are over the salary cap but remain under the luxury tax apron. For the 2026-27 season, this exception allows a team to offer a contract with a starting salary of up to $15,044,000. According to a report from Hoops Rumors, contracts signed using the NT-MLE can be for as long as four years, with annual raises of 5%.

This exception can be split to sign multiple players, giving a front office considerable flexibility to fill several roster spots. However, its use comes with a critical consequence: a team that uses the Non-Taxpayer MLE is hard-capped at the first tax apron for the rest of that season. This means the team's total salary cannot exceed that threshold under any circumstances, limiting its ability to make other moves like in-season trades that take on more salary.

The Taxpayer Mid-Level Exception (TP-MLE)

Teams with payrolls that already exceed the first tax apron have a more limited tool at their disposal: the Taxpayer Mid-Level Exception. This exception is designed for high-spending teams, allowing them to sign a free agent to a contract of a smaller value than the Non-Taxpayer MLE. While the specific first-year salary and maximum contract length for 2026-27 are not detailed in the available information, its strategic role is clear.

The primary function of the TP-MLE is to give tax-paying teams a mechanism to add a meaningful player without having to use a minimum-salary contract. Unlike the NT-MLE, using the Taxpayer MLE does not impose a hard cap, as these teams are already operating above that threshold. The main constraint is the significant luxury tax penalty that the additional salary will incur.

NBA Mid-Level and Bi-Annual Exception Decision Framework (2026-27)

A team's ability to use a specific salary cap exception is determined by its payroll. This framework maps a team's salary status to the tools it can use and the primary consequences of that decision.

Decision guide for 2026-27 NBA salary cap exceptions based on team salary status.
Team Salary Status	Available Exception(s)	2026-27 First-Year Value	Max Contract Length	Key Strategic Consequence
Operates under the salary cap, then uses all cap room	Room Mid-Level Exception (RMLE)	$4,449,000	2 years	Team forfeits access to the larger Non-Taxpayer MLE for that season.
Salary is over the cap but below the first tax apron	Non-Taxpayer MLE (NT-MLE) or Bi-Annual Exception (BAE)	NT-MLE: $15,044,000 BAE: $5,477,000	NT-MLE: 4 years BAE: 2 years	Using either exception imposes a hard salary cap at the first tax apron. The BAE cannot be used in consecutive years.
Salary is over the first tax apron	Taxpayer Mid-Level Exception (TP-MLE)	Not specified in evidence	Not specified in evidence	Allows a high-spending team to add a player, but adds to its significant luxury tax bill. Does not trigger a hard cap.