The NBA salary cap for 2025-26 is approximately $140.6M. Teams can go over the cap using "exceptions" (Bird rights, mid-level, etc.). The luxury tax kicks in at ~$170M. The second apron at ~$189M adds severe penalties.
Max salary depends on years of experience: 0-6 years = 25% of cap, 7-9 years = 30%, 10+ years = 35%. A 10-year vet max is roughly $49M/year. The "super max" (Designated Veteran Extension) goes up to 35% for players with their original team.
Named after Larry Bird. If a player has been with a team for 3+ years, the team can re-sign them over the salary cap. This is why teams trade FOR players before free agency — to get their Bird rights.
A free agent signs with their current team, then is immediately traded. Both sides benefit: the player gets a larger/longer contract, the original team gets assets instead of nothing. LeBron to Miami was a sign-and-trade.