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From the 2026/27 season, Premier League clubs are governed by Squad Cost Ratio (SCR) and Sustainability and Systemic Resilience (SSR), not by PSR for new seasons. SCR limits specified on-pitch costs, with an 85% Green Threshold and a higher, changing Red Threshold; SSR checks clubs’ cash, liquidity and equity. PSR can still be enforced for older seasons, including 2025/26 and earlier.
What are the Premier League’s current financial rules?
The system in force from the start of 2026/27 has two parts:
- Squad Cost Ratio (SCR) limits specified squad costs relative to football-related revenue and the net result from player sales.
- Sustainability and Systemic Resilience (SSR) checks whether a club has adequate short-term working capital, medium-term liquidity and long-term equity.
The Premier League’s simplified explainer, published on 21 July 2026, describes the current framework. It is a practical overview, not a substitute for the detailed wording in Appendices 2 and 3 of the Premier League Handbook.
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How does PSR differ from SCR?
PSR assessed a club’s overall financial performance over a rolling three-year period. SCR instead focuses on specified on-pitch costs and uses season-based estimates, in-season monitoring and post-season confirmation. SSR is a separate financial-health framework, rather than another name for SCR.
| Feature | PSR | SCR |
|---|---|---|
| What it measures | Overall financial performance, including revenue and costs | Specified squad costs against football-related revenue and net profit or loss from player sales |
| Assessment period | Rolling three-year period | Season-based tests |
| Monitoring | Retrospective assessment | In-season monitoring followed by confirmation using actual figures |
| Status in 2026/27 | No longer applies to new seasons; enforcement for seasons ending in 2025/26 or earlier is preserved | In force from the start of 2026/27 |
SCR was monitored in shadow during 2025/26, without enforcement under SCR. The League says SCR and SSR took full effect at the start of 2026/27. Levies for SCR breaches begin with breaches in 2027/28; the delayed levy start does not mean the rest of SCR is inactive in 2026/27.
Which costs and revenue count toward SCR?
SCR is not a general cap on everything a club spends. Its calculation uses specified squad costs and football-related revenue, including the net result from player sales.
Costs included
- Wages for contracted players and head coaches.
- Agents’ fees.
- Amortisation or impairment of transfer fees. Amortisation spreads a transfer cost over a player’s contract; impairment reflects a reduced registration value.
Administrative and commercial staff, assistant coaches and other members of the coaching team are excluded from the spending limit.
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Revenue included
- Club-generated commercial and matchday revenue.
- Net profits from non-football events at a stadium.
- Distributions or other income from the Premier League and other football competitions.
- Income from women’s teams and academies. Their costs are excluded from the SCR calculation, according to the League summary.
Why can clubs go above the 85% threshold?
The 85% figure is the Green Threshold, not the Red Threshold at which the published summary says a sporting sanction is triggered. A club initially receives an allowance of up to 30 percentage points above Green, giving it a starting Red Threshold of 115%. Promoted clubs receive the same initial allowance. The allowance can subsequently shrink or recover, and unused allowance does not carry forward.
The thresholds are measured against football-related revenue and net profit or loss from player sales. If a club exceeds Green but remains below Red, it may face a levy after confirmation; crossing Green alone does not automatically mean a points deduction. If it exceeds Red at the March compliance test, it faces a sporting sanction.
How are the thresholds checked?
- At the start of the season: the club and League agree estimated football-revenue figures for the in-season assessment.
- In October: the League monitors SCR using the agreed estimates.
- On 1 March: the main SCR Compliance Test takes place.
- In June, if the club was above Green: an Accounts Confirmation Test uses actual figures.
- In October: a True-Up may follow for clubs subject to confirmation.
Because the in-season revenue estimate is agreed in advance, the League says the process reduces exposure to an unexpected revenue fall during that season. Actual figures are still used for post-season confirmation; the estimate does not erase the need to confirm the result.
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What happens to the allowance after a breach?
Exceeding 85% in an Accounts Confirmation Test can reduce a club’s allowance. If the club returns to compliance in a later season, its allowance may increase by 10 percentage points, up to 30%. Levy relief is a separate mechanism: prior compliance may reduce or remove a levy under specified conditions, but it does not restore the allowance.
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What sanctions apply if a club breaches SCR?
The consequences depend on whether the club exceeds Green or Red, and when the breach occurs.
| Position against threshold | Potential consequence in the Premier League summary | Timing and qualification |
|---|---|---|
| Above Green but below Red | A levy may be due, subject to confirmation and the levy-offset mechanism | Levies apply to breaches from 2027/28 onwards. The League’s example uses the smaller of projected in-season overspend and confirmed post-season overspend, multiplied by the percentage overspend above 85%. |
| Above Red | Points deduction | At the March SCR Compliance Test; the published summary describes a fixed six-point deduction, increasing by one point for every £6.5 million spent over Red. |
The League summary describes the points-deduction calculation and levy mechanism at a high level. Clubs’ actual outcomes depend on the rules’ detailed definitions, tests and confirmation procedures; the summary alone is not enough to calculate a club’s individual liability.
How does SCR apply to clubs promoted from the Championship?
Promoted clubs receive the same initial 30-percentage-point allowance as other clubs, so their starting Red Threshold is 115%. They are subject to the season-based SCR framework and its monitoring and confirmation process. Promotion does not give a club a separate threshold above that initial allowance.
SSR also has a specific timing provision for newly promoted clubs: the League assesses their Liquidity and Positive Equity tests on 31 October. The Working Capital Test is separately described as a monthly requirement for each calendar month in the season.
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SSR adds three tests aimed at different time horizons. The figures below are the Premier League’s 2026 rules summary; they are not generic accounting ratios and should be read using the rule definitions.
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| Test | Time horizon | What the League summary requires |
|---|---|---|
| Working Capital | Short-term | At least £12.5 million for each calendar month in the season, from projected adjusted cash flow and qualifying working-capital funds. Qualifying funds include undrawn credit facilities, receivables and other funds accessible within 28 days. |
| Liquidity | Medium-term | Liquidity headroom for the current and following season must be zero or positive after an £85 million stress-test adjustment. The calculation includes 40% of the club’s squad market value as a liquid asset. |
| Positive Equity | Long-term | The Positive Equity Ratio, defined by the League as liabilities divided by adjusted assets, must be no more than 90% in 2026/27, 85% in 2027/28 and 80% from 2028/29 onward. Liabilities include shareholder loans and external debt; adjusted assets include squad value under the rule’s calculation. |
The League says clubs are assessed on 7 July each year and may face further checks after a Call-In Event. Newly promoted clubs have a 31 October assessment for Liquidity and Positive Equity. If a club is non-compliant, the League may require a business plan and measures to restore compliance; possible measures include restrictions on registering new contracts or a spending limit.
How do Premier League rules compare with UEFA’s?
The Premier League’s published explanation says UEFA caps the squad-cost ratio at 70% of total revenue for clubs governed by UEFA’s rules. A Premier League club participating in European competitions must comply with UEFA’s limit as well as the applicable Premier League rules.
| Rule system | Ratio in the 2026 Premier League explanation | Assessment cycle | Who it applies to |
|---|---|---|---|
| Premier League SCR | 85% Green Threshold, with a changing Red Threshold above it | Season-based | Premier League clubs |
| UEFA squad-cost rule | 70% of total revenue | Calendar-year basis | Clubs governed by UEFA’s rules, including Premier League clubs participating in European competitions |
The Premier League says its higher domestic threshold is intended to give clubs additional room to compete for European qualification and adjust if they stop qualifying. The different percentages do not make the rules interchangeable: clubs subject to both must meet both systems’ requirements.
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