The Boston Celtics’ luxury tax bill for 2025-26 was projected to push their combined payroll and tax obligations to roughly $512 million, which would have been the largest single-season financial commitment in NBA history. Faced with that number, the franchise traded Kristaps Porzingis to the Atlanta Hawks and moved Jrue Holiday in a separate deal during the summer of 2025, cutting the projected figure to about $274 million and reportedly saving roughly $210 million in tax penalties alone.
What Pushed the Bill So High
The Celtics’ problem started with the contracts of their two franchise players. Jaylen Brown signed a five-year, $304 million supermax extension in 2023, the richest contract in NBA history at the time, with annual salaries escalating past $60 million in the deal’s later years.1NBA. Jaylen Brown Agrees to Supermax Extension With Celtics Jayson Tatum then surpassed him with a five-year extension worth approximately $314 million.
Those two contracts alone consumed most of the salary cap. Around them, the Celtics had committed four years and $134.4 million to Jrue Holiday, signed Derrick White to a four-year extension worth up to $125.9 million,2NBA. Derrick White Agrees to 4-Year Extension With Celtics and carried Kristaps Porzingis at roughly $30 million per season. Add Payton Pritchard’s extension and the minimum-salary contracts filling out the roster, and the payroll was projected to land deep into second-apron territory.
For context, the largest single-season luxury tax payment in league history before this was Golden State’s roughly $170 million bill in 2021-22. Boston was on pace to pay well over $200 million in tax alone on top of actual player salaries.
Why the Rates Hit So Hard
Two features of the current Collective Bargaining Agreement turned a heavy bill into a historic one.
The first is repeater status. A team qualifies as a repeater if it has been a taxpayer in at least four of the previous five seasons, and the Celtics carried that status going into 2025-26. Repeater rates start at $3.00 per dollar over the tax line rather than $1.00, climb to $3.25 in the second bracket, $5.50 in the third, and $6.75 in the fourth, with an additional $0.50 per dollar in every bracket beyond. At the payroll level Boston was carrying, repeater status can more than double what a first-time taxpayer would owe on the same salary.
The second is the apron system introduced in the 2023 CBA. The first apron for 2025-26 sits around $195.9 million and the second apron around $207.8 million. Crossing the second apron, as the Celtics had, does more than raise the tax. It strips away the mid-level exception, bans using cash in trades, freezes the team’s first-round pick seven years out, and, if a team stays above the second apron in three of five seasons, pushes that first-rounder to the end of the round. First-apron restrictions also lock a team out of signing waived players whose prior salary exceeded the non-taxpayer mid-level exception, which closes off most of the buyout market. The Celtics’ front office was operating with those restrictions layered on top of the tax bill itself.
The Trades That Cut It
New ownership under Bill Chisholm inherited the bill and chose to reduce the roster rather than absorb the cost. In the summer of 2025, the Celtics traded Porzingis and a second-round pick to the Atlanta Hawks, and moved Holiday in a separate deal.
The two moves together reportedly saved roughly $210 million in tax penalties and about $238 million in total costs, dropping the projected payroll-and-tax figure from approximately $512 million to approximately $274 million. Some trackers showed the Celtics landing just below the tax threshold entirely after the trades, depending on how the open roster spots were filled.
Al Horford, the veteran center who had been a rotation fixture, left in free agency and signed with the Golden State Warriors. His departure was not itself a cost-cutting trade, but it removed another salary from the books and further changed the shape of the roster the Celtics will put on the floor.
What the Celtics Still Owe
The trades bought relief, not a clean slate. Brown’s supermax and Tatum’s extension continue escalating each year, and White’s deal keeps him on the books through 2028. The 2026-27 luxury tax threshold is projected to rise to roughly $201 million, with the first apron at $209 million and the second apron at $222 million. Those higher lines give some breathing room, but the escalating supermax salaries of Tatum and Brown will likely push the Celtics back toward or above the tax line even with a leaner supporting cast around them.
The 2024 championship roster proved the money worked on the court. The projected 2025-26 bill proved it would not keep working on the balance sheet, and the summer’s trades were the Celtics’ answer to that math.