Nine Teams Exceeded Luxury Tax Threshold In 2025

"Teams pay escalating penalties for exceeding the threshold in consecutive seasons. The Dodgers, Mets, Yankees, Phillies and Rangers have all paid the tax in at least three straight years - subjecting them to the highest escalator fees. The Astros went over the line for the second straight season. The Blue Jays, Padres and Red Sox had gotten below in 2024 and are categorized as first-time payors."

"This is the second straight year in which nine teams paid the CBT. The Braves, Giants and Cubs had gone over the line in '24 but dipped below this year, which resets their status going into 2026. Atlanta's active offseason puts them in position to go back into tax territory next year, when the base threshold climbs to $244MM. San Francisco and Chicago each have projected CBT numbers more than $40MM below that right now."

"While public estimates from RosterResource and Cot's Baseball Contracts offer an excellent approximation of teams' payroll commitments, the official numbers are not available during the season. It's not uncommon for rounding errors in those calculations to vary by a few million dollars. That generally isn't a big deal but can matter for teams that are hovering very close to the tax line. Each of the Red Sox ($249MM payroll), Astros ($246MM) and Rangers ($241.38MM) were believed to have gone narrowly beyond the $241MM cutoff, but that wasn't 100% established until this evening - particularly in the case of Texas."

Nine teams exceeded the $241 million competitive balance tax threshold, with the Dodgers ($169.4MM), Mets ($91.6MM), Yankees ($61.8MM), Phillies ($56.1MM), Blue Jays ($13.6MM), Padres ($7MM), Astros ($1.5MM), Red Sox ($1.5MM) and Rangers ($190K) paying CBT penalties. Penalties escalate for consecutive-season overages; Dodgers, Mets, Yankees, Phillies and Rangers face the highest escalators, Astros exceeded for a second straight season, and Blue Jays, Padres and Red Sox are first-time payors. The Braves, Giants and Cubs fell below this year, resetting their status ahead of the $244MM 2026 threshold. Public payroll estimates can vary by millions, affecting teams near the line.

Read at MLB Trade Rumors