How is the actual luxury tax amount calculated per team?
The acutal luxury tax amount is calculated as a straight percentage of the payroll in excess of the luxury tax threshold for that particular year. For example, if Team A has a payroll of $150.5m when the luxury tax threshold is $120.5m and the luxury tax rate is 30%, Team A’s luxury tax bill will come to $30m x 30% or $9m.
