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PSR and the new rules: what applies when?
The change is season-specific. The Premier League collected SCR information in shadow form during 2025/26, but did not enforce SCR then. SCR and SSR became the rules for current-season compliance from the start of 2026/27. PSR enforcement powers remain available for alleged breaches relating to periods ending in 2025/26 or earlier.
The League announced the new system on 21 November 2025. It said clubs supported SCR and SSR, while there was insufficient support for Top to Bottom Anchoring. The Premier League Handbook 2026/27, published on 31 July 2026, contains the controlling rules in Appendices 2 and 3; the League’s public explainer is a summary, not a substitute for the Handbook’s detailed definitions, calculations, exceptions and appeal provisions.
How the old PSR limit worked
PSR assessed a club’s adjusted earnings before tax across a rolling three-season period. The headline allowable loss was £105 million over that period, reduced by £22 million for each season the club spent in the Championship during the assessment period. The £105 million figure is the Premier League’s 2024 threshold for the standard assessment, not a current 2026/27 limit.
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Adjusted earnings, not statutory net loss
The calculation began with profit or loss after depreciation and interest, but before tax. It then allowed specified costs to be added back. Premier League examples include spending on infrastructure, community activity, women’s football and youth development, as well as depreciation of tangible fixed assets. The League also exceptionally permitted COVID-related cost add-backs for 2019/20, 2020/21 and 2021/22.
That means a club’s PSR result was not simply the net loss shown in its statutory accounts: permitted adjustments affected the figure tested against the limit. For the League’s COVID-affected example, the period calculation paired the 2022/23 and 2021/22 figures with the average of 2019/20 and 2020/21.
How PSR cases were handled
PSR was an annual assessment of the three-year period. Under the League’s standard directions, cases were intended to be resolved in the complaint season, with sanctions imposed before the following Annual General Meeting. Independent Commissions decided alleged breaches and sanctions. Possible outcomes included fines, points deductions and other sporting measures; decisions were published after proceedings concluded.
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What the 2026/27 Squad Cost Ratio measures
SCR compares defined on-pitch squad costs with football-related revenue plus net profit or loss from player sales. The standard Premier League green threshold is 85%, according to the League’s 2025 explanation. This is a ratio test, rather than a cap expressed as a permitted total loss.
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The League’s summary identifies player and head-coach wages, agents’ fees, and transfer-fee amortisation or impairment as squad costs. The scope includes contracted players and head coaches. Administrative and commercial employees, assistant coaches and other members of the coaching team are excluded from the defined squad-cost calculation.
Revenue included
Football-related revenue covers club-generated football income such as commercial and matchday revenue, along with net profits from non-football events at a stadium. It also includes central distributions and competition income. The League says women’s-team and academy income enters the calculation, while their costs do not.
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Premier League and UEFA thresholds are separate
The League’s summary describes a 70% threshold for clubs competing in UEFA competitions, as required by UEFA’s separate rules. A Premier League club playing in Europe must therefore meet UEFA’s lower threshold as well as the domestic rules; the two percentages belong to different regulatory systems.
When SCR is checked and what happens above 85%
Unlike PSR’s rolling three-year review, SCR runs by Premier League season. Clubs and the League agree estimated revenue inputs before the season; those agreed figures support monitoring during the season rather than an immediate recalculation every time revenue changes. The League says the seasonal timetable aligns with clubs’ budget, accounts and forecasting cycle.
SCR monitoring timetable
- Before the season: the club and League agree the estimated revenue inputs used in the SCR model.
- October: the League conducts monitoring.
- 1 March: the League carries out the SCR Compliance Test. A club above its red threshold at this test faces a sporting sanction.
- June: a club above green but below red is checked against actual revenue and costs in the June Accounts Confirmation Test. If its confirmed ratio remains above 85%, an October true-up follows.
A club at or below 85% passes without further action. A club between the green threshold and its red threshold can face a financial levy after confirmation; exceeding red can bring a sporting sanction. The League says SCR sporting sanctions are imposed in the season of the breach. SCR took full effect in 2026/27, but levies are payable only for breaches from 2027/28 onward.
How the red threshold and allowance change
Each club initially receives an allowance of up to 30 percentage points above green, putting its initial red threshold at 115%. If the club exceeds 85% in the confirmation test, the allowance shrinks by the amount of the excess, potentially to zero. Unused headroom does not carry forward. A club that returns to compliance can rebuild its allowance by 10 percentage points for each qualifying season, up to the 30-point maximum.
The League’s example illustrates the mechanism: a club recording 100% in season one has a 15-point allowance and a 100% red threshold in season two. If it reaches 101% in season two, it has exhausted that allowance and breached red.
What SSR adds: three financial-resilience tests
SSR is separate from SCR’s squad-cost ratio. It assesses short-, medium- and long-term financial resilience through Working Capital, Liquidity and Positive Equity tests. The League’s public summary outlines their purpose and some parameters; it does not establish every calculation or the outcome for an individual club.
Working Capital: short-term resources
The League’s 2026 explainer describes a minimum of £12.5 million in projected cash balances and qualifying working-capital funds for each month of the season. Qualifying funds can include undrawn facilities, receivables and other funds accessible within 28 days.
Liquidity: medium-term resilience
The League describes a two-season liquidity test requiring zero or positive headroom after an £85 million stress adjustment. Its summary says the calculation includes 40% of the squad’s market value as a liquid asset. These are parameters in the public explainer; the Handbook’s Appendix 3 governs the technical calculation.
Positive Equity: long-term balance-sheet health
The League characterizes Positive Equity as a balance-sheet assessment addressing long-term health and excessive leverage. Its public summary does not provide enough detail to calculate a club’s result, so a club-specific assessment requires the Appendix 3 rules and relevant financial information.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.PSR and SCR at a glance
| Feature | Legacy PSR | SCR from 2026/27 |
|---|---|---|
| What is tested | Adjusted earnings before tax, after permitted add-backs (Premier League PSR explanation). | Defined squad costs against football-related revenue plus net profit or loss from player sales (Premier League SCR summary). |
| Assessment period | Rolling three-year period (Premier League PSR explanation). | One Premier League season (Premier League SCR explanation). |
| Threshold structure | Allowable-loss ceiling subject to a Championship-season reduction (Premier League, 2024). | Green ratio threshold and an allowance-based red threshold (Premier League, 2025–26 explanations). |
| Monitoring | Annual assessment of the relevant period (Premier League PSR directions). | In-season monitoring and tests, followed by confirmation against actual figures (Premier League SCR explanation). |
| Potential consequences | Independent Commission sanctions, including possible fines, points deductions or other sporting measures (Premier League PSR directions). | Financial levy or sporting sanction under SCR, alongside SSR resilience requirements (Premier League SCR and SSR summaries). |
The League’s published explanations use the term “seasonal basis” for SCR: “The Premier League’s SCR Rules run on a seasonal basis to align with how clubs currently prepare budgets, annual accounts and forecasts.” The League’s 21 November 2025 statement also said: “The existing Profitability and Sustainability Rules will remain in place for the remainder of 2025/26.”
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