MLB.com wrote: Each year, clubs that exceed a predetermined payroll threshold are subject to a Competitive Balance Tax -- which is commonly referred to as a "luxury tax." Those who carry payrolls above that threshold are taxed on each dollar above the threshold, with the tax rate increasing based on the number of consecutive years a club has exceeded the threshold. A team's Competitive Balance Tax figure is determined using the average annual value of each player's contract on the 40-man roster, plus any additional player benefits. The threshold was $189 million from 2014-16, but the following increases were put in place per the 2017-21 Collective Bargaining Agreement: 2017: $195 million* 2018: $197 million 2019: $206 million 2020: $208 million 2021: $210 million *For 2017 only, clubs that exceeded the threshold paid the average between what their luxury tax was under the 2017-21 Collective Bargaining Agreement rules and what it would have been per the previous CBA. A club exceeding the Competitive Balance Tax threshold for the first time must pay a 20 percent tax on all overages. A club exceeding the threshold for a second consecutive season will see that figure rise to 30 percent, and three or more straight seasons of exceeding the threshold comes with a 50 percent luxury tax. If a club dips below the luxury tax threshold for a season, the penalty level is reset. So, a club that exceeds the threshold for two straight seasons but then drops below that level would be back at 20 percent the next time it exceeds the threshold. Clubs that exceed the threshold by $20 million to $40 million are also subject to a 12 percent surtax. Meanwhile, those who exceed it by more than $40 million are taxed at a 42.5 percent rate the first time and a 45 percent rate if they exceed it by more than $40 million again the following year(s). Beginning in 2018, clubs that are $40 million or more above the threshold shall have their highest selection in the next Rule 4 Draft moved back 10 places unless the pick falls in the top six. In that case, the team will have its second-highest selection moved back 10 places instead. So if the Mets have a payroll of $211 million this year, the penalty would only be $200,000. Therefore, going "slightly" over the threshold isn't a big deal, but it does set you up for larger penalties down the road. Maybe the Mets want to stay under this year, knowing that with Cano coming back they're very likely to be over next year. But I think that if the extend Lindor (increasing his AAV over the $22.5 million it's currently at) and/or Conforto, combined with a possible signing of Brad Hand, they're likely to go over anyway. In that case, $25 million to Springer would have actually cost them $30 million, in addition to potentially marginalizing Dominic Smith. The other wild card in this is that the current CBA, with its rules and its thresholds, expires this year. There may not even be a luxury tax in 2022 and beyond, and if there is, the thresholds and the penalties might be very different. I expect the players will demand a requirement that clubs have a minimum payroll to counter the luxury tax.