A salary cap is the limit on the total player salary a basketball team can carry, set by the league each season. In pro basketball's salary rules the cap is "soft": a team can go over it to keep its own players or by using named exceptions, so most teams sit above the line most of the time.
In HoopSim the salary cap is $154.6M by default, and the commissioner can change it. Your tier is set by the highest line your committed money has reached: under the cap, over the cap, luxury tax, first apron or second apron, which works as a hard cap. Committed money is every active contract's salary this season plus cap holds and dead money. Under the cap you sign free agents with cap space; over it you need an exception, Bird rights or a minimum deal.
Rulebook: Cap lines. Related: soft cap, hard cap, cap space, luxury tax.