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Post by Celtics GM (Jose) on Sept 8, 2013 0:49:51 GMT
The Luxury Tax (LT) is imposed every time a team is over the cap during the Season (Week 1 through Week 23).
For every 1k a team is over the Cap, it receives a 4k penalty the next season. So if the cap is 70.00M and a team has a payroll of 70.54M, 0.54M (540k) above the Cap, the penalty for next season will be 2.16M (2160k), resulting in a total Cap of 68.84M for the following season.
When a team is notified of the impending Luxury Tax, it has 7 days to rectify it. At the end of that period, the penalty will be applied, regarding next year's Cap.
If a team goes over the LT more than once over a season, the Luxury Tax will be applied to the maximum value a team as strayed over the Salary Cap. However there will be a 250k penalty for every time a team goes over the Cap that will accumulate with the Luxury Tax, affecting next year's Cap.
The only way to go over the cap is by trade. A team cannot bid in the FA or sign his rookies if it's already over the cap or would be over if that bid succeeds.
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