The NBA has set next season's salary cap at $58.7 million US, paving the way for contracts to be signed starting Wednesday.

The tax level is $71.7 million US, with harsher penalties starting this season for teams that exceed it. Teams formerly paid $1 for every $1 US they were over, but the penalties now start at $1.50 US for teams up to $4.9 million US over, with increases from there.

Contracts such as the one Dwight Howard agreed to with Houston couldn't be signed during the league's moratorium period while the cap was calculated.

The cap is a slight increase from this season's $58 million US.

The mid-level exception for non-taxpayers is $5.15 million US. It's $3.2 million US for teams over the tax, and there's a mid-level worth $2.7 million US for teams with room under the salary cap.