Cleveland Cavs Salary Cap Breakdown: Payroll, Tax Position and Future Flexibility

Here’s where the Cavaliers sit financially heading into the regular season.

Nov 15, 2025; Cleveland, Ohio, USA; Cleveland Cavaliers owner Dan Gilbert watches his team against the Memphis Grizzlies in the first quarter at Rocket Arena. Mandatory Credit: David Richard-Imagn Images | IMAGN IMAGES via Reuters Connect

Last season, Cleveland owned the biggest payroll in the league, as the only second apron team. Owner Dan Gilbert paid $211 million for last year’s Conference Finalist, about four million more than the NBA champion New York Knicks.

General manager Koby Altman made some moves this offseason to get the Cavs under both the first and second apron. But those transactions required some patience from their veteran point guard, as Cleveland had to wait until mid-August to do business.

May 23, 2026; Cleveland, Ohio, USA; Cleveland Cavaliers guard James Harden (1) drives the ball up court in the second quarter against the New York Knicks during game three of the eastern conference finals for the 2026 NBA playoffs at Rocket Arena. Mandatory Credit: Scott Galvin-Imagn Images | IMAGN IMAGES via Reuters Connect

Thank You, James Harden

The Cavs were able to bring in young athletic forward Peyton Watson in a sign-and-trade with the Denver Nuggets. Watson signed a four-year, $88 million deal with a player option and trade kicker.

In order for this to become possible, Cleveland needed James Harden to lower his annual salary by signing a three-year, $97 million contract, instead of a more costly two-year deal.

Combined with Watson’s new contract, the waiving of Cam Whitmore and the low-cost signing of 2022 draft pick Khalifa Diop, the Cavs are right below the first apron hard cap of $209.015 million.

Jun 24, 2022; Independence, Ohio, USA; Cleveland Cavaliers second round draft pick Khalifa Diop talks to the media during a press conference introducing the first two draft picks of the Cavaliers at Cleveland Clinic Courts. Mandatory Credit: Ken Blaze-USA TODAY Sports | USA TODAY Sports

Less Restrictions for the Front Office Going Forward

Some restrictions that the Cavaliers had to face last season included the inability to make sign-and-trades to acquire players and not being able to bring in a waived buyout player if his previous contract was higher than the non-taxplayer midlevel exception.

Cleveland also faced stricter trade rules, specifically the trade salary rules. When Koby Altman faced the decision to deal Darius Garland in February, his options were very limited, because of the second apron. Instead of being able to attach extra players to Garland in a deal, Altman was limited to a select number of options that had to be making the same exact salary as Garland.

The only three players who fit those requirements were New Orleans forward Zion Williamson, recently dealt Portland guard Ja Morant, and the player who the Cavs decided to trade for, James Harden.

Now that Cleveland is under both aprons, they will be free to make trades without stricter salary matching rules.

May 13, 2026; Detroit, Michigan, USA; Cleveland Cavaliers center Jarrett Allen (31) walks off the court after game five of the second round of the 2026 NBA Playoffs against the Detroit Pistons at Little Caesars Arena. Mandatory Credit: Rick Osentoski-Imagn Images | IMAGN IMAGES via Reuters Connect

What Moves Could Be Made This Season?

Heading into the year, the Cavs roster seems to be pretty set. There may be some two-way promotions throughout the season, but for the most part, Cleveland’s team should remain intact.

That is, if the season goes the way the Cavaliers expect. If things begin to tilt downwards and Koby Altman is forced to make a move around the trade deadline, the two most likely candidates for a trade would be center Jarrett Allen and guard Sam Merrill.

Allen, the longest tenured Cavalier, is heading into the first season of the three-year $91 million extension he signed in July 2024. He played terrific for Cleveland after the James Harden trade, averaging 19.7 points and 10.0 rebounds on 71% shooting after Feb. 1. But he might be the best contract that the Cavs would have to part from, if Cleveland was in a rough spot.

HISTORIC NIGHT FOR JARRETT ALLEN 🚨

💪 40 PTS (career-high)
💪 17 REB
💪 5 AST
💪 2 STL
💪 4 BLK
💪 29:30 of playing time

The FIRST player in NBA history with 40/15/5 in under 30 minutes!!! pic.twitter.com/oTaaj2ubt4

— NBA (@NBA) February 2, 2026

Merrill is coming off a career year at age 29, where he posted career highs in points, rebounds, assists, field goal percentage and minutes per game. The sharpshooter nailed a career-best 158 threes on 42% shooting last season. His perimeter defense has also improved drastically since coming to Cleveland. In the event that Koby Altman had to move on, Merrill provides a valuable asset to other teams (three-point shooting) on a very friendly $9.1 million salary.

Cleveland also has young guards like Jaylon Tyson, Tyrese Proctor, Meleek Thomas and Craig Porter Jr. who could fill that position if Merrill had to get dealt.

A Much Better Financial Spot For Koby Altman

Overall, the Cavs should be feeling great about where they are financially heading into the season. As long as Cleveland meets or exceeds their expectations of being a playoff threat in the Eastern Conference, there shouldn’t be any need for a drastic change in the Cavs locker room.