The league continued to operate without such a cap until the 1984–85 season, when one was instituted in an attempt to level the playing field among all of the NBA's teams and ensure competitive balance for the League in the future. The NBA had a salary cap in the mid-1940s, but it was abolished after only one season. Teams that go above the luxury tax cap are subject to the luxury tax (a tax on every dollar spent over the luxury tax cap). Soft salary caps allow teams to go above the salary cap, but will subject such teams to reduced privileges in free agency. Hard salary caps forbid teams from going above the salary cap. The majority of American leagues (NFL, NHL, MLS) have hard caps while the NBA has a soft salary cap. For the 2022–23 season, the cap is set at $123.655 million. Under the CBA ratified in July 2017, the cap will continue to vary in future seasons based on league revenues. This limit is subject to a complex system of rules and exceptions and is calculated as a percentage of the league's revenue from the previous season. Like the other major professional sports leagues in North America, the NBA has a salary cap to control costs and benefit parity, defined by the league's collective bargaining agreement (CBA). ![]() The NBA salary cap is the limit to the total amount of money that National Basketball Association teams are allowed to pay their players. ![]() National Basketball Association payment cap
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