The salary cap is the NBA's limit on how much a team can spend on player salaries in a season. It isn't a hard limit, teams routinely spend above it using a set of exceptions, which is why the cap is really just the first of four spending thresholds that shape how a team can build and manage its roster.
Team spending in the modern NBA is really governed by four separate lines, not one. Each one you cross unlocks a new set of restrictions on how a team can build its roster. These are the 2025-26 figures.
The jump from the cap to the tax line is far bigger than any of the gaps above it, which is a big part of why "the tax line" gets talked about as the real first threshold that changes team-building behavior, more than the cap itself.
The cap is tied to league revenue, so it moves with new media rights deals and league-wide income. It jumped especially hard heading into 2025-26 on the back of the NBA's new national TV deal.
Almost never. The NBA cap is a "soft cap" — teams can exceed it using a set of exceptions (Bird rights to re-sign their own players, the mid-level exception, and others), so most teams operate somewhere between the cap and the luxury tax line, and plenty go well beyond that.
They pay a penalty on every dollar spent above the tax line, on a sliding scale that gets steeper the further over they go, and steeper again for teams that are repeat tax payers in multiple recent seasons. That money gets redistributed to teams that stayed under the tax.
The cap is set as a percentage of the league's actual basketball-related income (BRI) from national and local media deals, ticket sales, sponsorships, and more. When league revenue grows, most notably from new national TV deals, the cap grows with it.