Indiana Pacers hover above luxury tax threshold as roster costs climb

The Indiana Pacers have entered the 2026-27 season with a payroll of roughly $206.3 million, putting them over the luxury tax limit of $200.428 million. This marks the first time the franchise has been above the tax line since the 2004-05 campaign, joining only a few teams that have never crossed it in recent decades. Off-season moves, including the addition of Kelly Oubre and Larry Nance and the retention of Quenton Jackson, increased expenses, while the only reduction came from waiving center Micah Potter.

General manager Chad Buchanan noted ownership’s willingness to spend if it helps the team contend for a championship. The Pacers can still avoid a tax bill by making salary-cutting trades before the league year concludes, with mid-size contracts on players like Oubre, Ben Sheppard, Jarace Walker and Jay Huff likely to be examined. Their historical aversion to paying the tax makes this financial situation a point of focus throughout the season.