Can someone please explain the Mid-level exception?

[CELTICSofBOSTON]

I've recently tried to get a better understanding of the NBA salary cap but still haven't found a good explanation of how it works.

I guess the most confusing thing to me is which exception a certain team receives.

Is that decided based on the salary of the prior season or the amount of cap space (or lake thereof) at the time the MLE contract is signed?

[Roy H.]

There are two MLEs, and a related exception:

1) The "room" exception.  Teams that utilize cap room get this exception, and lose the other two. Under the new CBA, I believe it starts at $4.3 million.

2) The Mid-level Exception. Teams that don't have cap room get this. It's available to all such teams, but a team using the MLE is "hard-capped" at $6 million above the luxury tax (known as the "apron") meaning a team can't exceed that amount at any point in the season. The MLE starts at $8.4 million.

3) The Mini-MLE / Taxpayer MLE. Teams that exceed the luxury tax by more than $6 million can use the mini-MLE, which starts at $5.2 million.

That's a really quick summary that leaves out a lot of nuance.