Miami Heat 2026 Salary Cap Tracker: How Much Room, Flexibility Do They Have This Offseason

Here's a breakdown on what a vital offseason for the Miami Heat could look like.

Oct 23, 2024; Miami, Florida, USA; Miami Heat president Pat Riley addresses the crowd during the Pat Riley Court dedication ceremony at halftime at Kaseya Center. Mandatory Credit: Jim Rassol-Imagn Images | Jim Rassol-Imagn Images

After an up-and-down regular season that ended with a tough Play-In Tournament loss, the Miami Heat head into the offseason with many questions and a whole lot up in the air.

Here's a breakdown on where they stand with their cap space, the first and second aprons, upcoming free agents

Free Agents and Options

1. Norman Powell: After earning a $20.48 million salary in the 2025-2026 season, Powell is, perhaps, the most interesting case. Although Powell started the season off playing well enough to be selected to his first All-Star team as a 32 year-old, Powell's production, efficiency and impact plummeted afterwards.

Head coach Erik Spoelstra gradually went away from playing him alongside Tyler Herro as the season went on to the point that they played just 40 seconds together in their season-ending loss to the Charlotte Hornets.

Although many fans have come to suspect that Powell may not be back after his comments at Heat exit interviews, the Heat own Powell's Bird rights. They can bring him back over the cap line and more importantly, can retain his servives and his contract as a potential trade piece.

The caveat is that, if the Heat wanted to use Powell's contract in a trade this offseason, they would have him to sign an extension before the end of the league year on June 30th. Otherwise, if signed during free agency at the start of July, they wouldn't be able to be trade him until mid-December at the earliest.

The Heat have re-signed players in the past, in part, due to their trade utility. Powell would also serve their ever-present agenda to win as many games as possible even if they strike out on big-name targets. Would it be all that surprising if they tried to bring him back on a two or three-year deal with a player option on the last season?

2. Andrew Wiggins: Having played a season and a half with the Heat, Wiggins will have the opportunity to become an unrestricted free agent this summer with his $30.17 million player option. There isn't much clarity on what he will decide to do. Perhaps the 31 year-old would prefer to look for more years on his next contract, but it doesn't seem like anyone knows for sure at the moment.

If Wiggins chooses to accept his player option, he would be immediately trade-able in the off-season. Additionally, if they were to sign him to an extension by June 30th up to around $33.86 million at the most in the first season, he would also become immediately trade-able. If he opts out and becomes a free agent, if they end up re-signing him, just like Powell, he would not be trade-able until mid-December at the earliest.

3. Pelle Larsson: It is safe to say that the 2024 second round pick, who started 54 games in his second for the Heat this past season and who the head coach regularly gushes over, will be back. The Heat have a team option for him at about $2.3 million for next season.

4. Simone Fontecchio: The sharp-shooting wing earned $8.3 million with the Heat in 2025-2026 and was a part of the rotation many times throughout the season. It is unclear what he and his agent will ask for as an unrestricted free agent, but he's said on multiple occasions recently that he'd love to be back. It's easy to imagine a scenario where they'd bring him back on his $2.66 million veteran minimum contract.

5. Keshad Johnson: The athletic second-year frontcourt player earned $1.95 million with the Heat last season and had flashes of playing time at times throughout the season, specifically when the Heat were without one of Bam Adebayo or Kel'el Ware. He ended up playing in 32 games.

Johnson may not be a priority for the Heat this summer, but this is another player that can easily be back next season. Johnson will be a restricted free agent, meaning the Heat can match other teams' offers or tender a qualifying offer of around $2.7 million.

6. Jahmir Young: After being a two-way player for the Heat for most of the season, the Heat signed Young to a standard contract near the end of the season after they waived Terry Rozier. They have a team option for him next season at $2.41 million if they want to bring him back.

Cap Space/Luxury Tax Aprons

In short, the Heat will likely be nowhere near even the vicinity of having cap space unless they renounce as many cap holds as possible, including the aforementioned free agents, which would eliminate the Bird Rights for each of them.

Without accounting for the possibilities of the aforementioned free agents returning and the Heat [presumably] signing their first and second-round draft picks. This would get them to somewhere around $28 million in potential cap space based on current salary cap projections, with 11 players under contract (14 is the league minimum).

If the Heat don't renounce any of those cap holds, they will be around $36.5 million over the salary cap line. This is all assuming they draft at pick no. 13, which is not yet set in stone. There's also the possibility they draft at pick 14, which would earn just slightly less than the 13th pick.

Much more interesting, however, is the scenario where they got lucky in the Draft Lottery and hit on their sub-five percent chance of moving into the top four of the draft. In that case, they'd be paying that player significantly more than the 13th pick next season, anywhere between around $4.8 million and $8.67 million more.

Additionally, if they don't renounce all their cap holds and draft 13th, the Heat will be somewhere around $33 million below the luxury tax line, roughly $39 million below the first apron and $51 million below the second apron in these conditions.

If the Heat end up finding a way to pull off deals for any of the bigger name players that have been mentioned as potential targets for them this offseason, their willingness to pay the luxury tax probably changes.

If they strike out, however, it will be interesting to see what happens if Wiggins accepts his player option since that alone would put them over the tax line before even getting into the deals of their other free agents.

If Wiggins opts out, there may be a world where the Heat can bring back the other free agents while remaining just under the luxury tax line.

Exceptions

As long as the Heat remain under the luxury tax line, they will have access to a $15 million non-taxpayer mid-level exception that they can use if Wiggins opts out. They will also have access to a $5.478 million bi-annual exception in free agency, (both expire in April 2027).

Additionally, they will have access to two different traded player exceptions, ($16.83 million and $5.6 million), which they received as part of their deals to send out Duncan Robinson and Haywood Highsmith last summer. Those exceptions, which allow them to take in salary up to those figures without having to send any back, expire on July 7 and August 15, respectively.

Potential Contract Extensions

1. Norman Powell: Currently eligible for an extension, with the window closing on June 30, 2026.

2. Tyler Herro: Herro's extension window opens on July 1, 2026 and the window closes on June 30, 2027.

3. Jaime Jaquez Jr.: His window also opens on July 1, 2026, but closes in mid-October 2026, before the the 2026-27 regular season tips off.

4. Pelle Larsson: Larsson's extension window opens on July 6, 2026 and closes on June 30, 2027.

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For more Miami Heat information and conversation, check out Off The Floor.

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Alexander Toledo is a contributor to Miami Heat On SI and producer/co-host of the Five on the Floor podcast, covering the Heat and NBA. He can be reached at Twitter: @tropicalblanket

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