What to know about the Milwaukee Bucks salary cap, luxury tax situation in 2026-27
· Yahoo Sports
The Milwaukee Bucks have made a turn away from perennial championship contender to a team that is looking to reset its roster and build back to that standard through talent acquisition. During the final throes of the Giannis Antetokounmpo Era, the team was hamstrung financially by rostering high-salaried veterans, leaving the rest of the roster to be built out on minimum deals.
But, depending on how the front office handles this coming trade deadline and offseason, the Bucks can completely unwind themselves from the last vestiges of that chapter and have nearly a clean financial slate with which to operate with.
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Here are some key things to know about the Bucks’ salary cap situation in 2026-27:
Are they over the salary cap?
Yes, the Bucks currently are operating about $30 million over the $164 million cap. A big chunk of that is $21.97 million in “dead money” owed to Damian Lillard and Vasilije Micić.
Can they cut anyone?
Yes, the Bucks can cut anyone at any time. The current money on their books is already counted whether a player plays for them or not.
However, they can only stretch that player’s contract if, in this year or any future year, they don't have more than 15% of the cap tied up in stretched salary. That's the limitation and why they likely won't be able to stretch anyone because Lillard and Micić are currently taking up 13.3% of that room in 2026-27. That percentage of the cap declines over the years, but Lillard remains on the books through 2030.
Are the Bucks in the luxury tax?
No. Even with 16 guaranteed contracts on the books in training camp, they are about $10 million under the tax line.
Why can’t the Bucks pay luxury tax this year?
Well, they can if they wanted to. But it has been well-established that teams without true title hopes work hard to avoid paying the tax because of the league’s harsher penalties for teams that repeat as taxpayers.
In the 2023 collective bargaining agreement, the league instituted higher rates for teams ($2.50 for every $1 over the cap) if they finished a season in the luxury tax in three of the previous four seasons. The Bucks paid luxury taxes from 2021-25, totaling about $220 million.
They avoided the tax last season and will again this season. By doing so, it means they will have stayed out of tax territory for at least two of the previous four seasons and the team would harbor only a $1.50 per dollar over the cap penalty beginning in 2027-28 should they be a tax team.
Can the Bucks trade for a high-salary player?
Yes, but only to a point. The Bucks can use that wiggle room under the tax line to acquire a player making more money than one of their own, ostensibly to also receive future draft capital, but they have to make sure they don’t end the season in the tax.
What are the benefits of staying out of the luxury tax?
One, teams that do not pay a luxury tax receive cash from the teams that do. The Bucks received about $4.85 million from the seven tax-paying teams last season.
From a roster-building standpoint, the Bucks would again have access to the non-taxpayer mid-level exception in the summer of 2027, which will be worth roughly $17.2 million. This exception could be split among multiple players. The team could also use a bi-annual exception that is projected to be worth $5.8 million.
Or, if they chose to stay below the salary cap line altogether – but still use up their cap space – the Bucks could access the room mid-level exception, which would be worth roughly $10 million.
A team must choose one path each season, however: use cap space and get the room mid-level exception, or operate over the cap but below the luxury tax line and get access to the non-taxpayer mid-level exception and bi-annual exception.
Player bonus watch
The Bucks begin the year about $10 million under the luxury tax line. Bonuses that are earned count toward the tax (as opposed to the aprons, which include earned and unearned bonus totals). So, the Bucks must keep enough of a buffer so that if they elect to keep Tyler Herro and Kyle Kuzma, and they hit those bonuses, the team doesn’t bleed into the tax.
Tyler Herro 2026-27 bonuses
- Must play 75% of regular-season games (62) to earn any of the following bonuses.*
- MVP ($1 million)
- Defensive player of the year ($1 million)
- First- or second-team all-NBA ($1 million)
- Third-team all-NBA ($500,000)
Herro cannot earn more than $2.5 million in bonuses in one season.* Extension was signed before the 2023 CBA created the 65-game rule for awards.
Kyle Kuzma 2026-27 bonuses
If Kuzma plays in 65 regular-season games he will earn $290,000 for each below:
- Team's net rating in the regular season is greater than or equal to 1.5
- Team's net rating in the regular season is greater than or equal to 3.5
- Team makes the playoffs
- Team makes the NBA Finals and player plays in at least 75% of playoff games
- Team is top five in the regular season in one or more of the following: assist/turnover ratio, offensive rating, defensive rating
Kuzma also can earn $750,000 for each of the following should he play 65 games:
- 7.5 defensive rebounds per 36 minutes
- True shooting percentage of 56% or better
- Blocks plus steals per 36 minutes is 1.6 or better and fouls per 36 is 3.0 or lower
Kuzma can earn $1.45 million being named to an all-NBA team or an all-defensive team honors.
However, Kuzma cannot earn more than $1.45 million cumulatively from any of the individual milestones reached.
What about the Giannis trade exception?
By dealing Giannis Antetokounmpo, the Bucks have a $25.4 million trade exception in which they could take a player into. That money would count toward the tax, however, so it’s unlikely the Bucks would use that space unless they had moved far enough below the tax line to absorb a deal of that size.
They could use the exception up until July 6, 2027, though, when their books are far cleaner.
Bogoljub Marković contract details
The Bucks brought their 2026 second-round pick to the United States this season, but they did not invest a ton of capital in the 21-year-old. He is making $1.3 million this year, and his $2.3 million deal is only half guaranteed next season. The contract becomes non-guaranteed in years three ($2.7 million in 2028-29) and four ($2.9 million team option in 2029-30).
This article originally appeared on Milwaukee Journal Sentinel: What to know about the Milwaukee Bucks salary cap, luxury tax situation in 2026-27