From the 2026/27 season, the Premier League’s active financial framework is Squad Cost Ratio (SCR) and Sustainability and Systemic Resilience (SSR). The old Profitability and Sustainability Rules (PSR) no longer apply to new seasons, though the League can still pursue PSR breaches for seasons ending in 2025/26 or earlier. SCR’s 85% figure is a Green Threshold, not a hard spending ceiling: clubs start with a higher Red Threshold, and the consequences depend on which threshold they cross and when.
What the Premier League’s financial rules regulate
The framework has two distinct parts. SCR limits specified spending on a club’s playing squad relative to football-related revenue and the net result from player sales. SSR separately checks whether a club has adequate cash, liquidity and equity. A club can therefore satisfy the squad-cost test while still facing a concern under one of the financial-health tests.
The Premier League’s simplified explainer, published on 21 July 2026, describes the current rules. It is a practical overview rather than a substitute for the detailed wording in Appendices 2 and 3 of the Premier League Handbook.
How does PSR differ from SCR?
PSR and SCR measure different things and operate on different timetables. PSR looked at a club’s overall financial performance over a rolling three-year period. SCR focuses on a defined set of squad costs, uses a season-based limit and combines checks during the season with confirmation using actual post-season figures.
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| Feature | PSR | SCR |
|---|---|---|
| What is measured | Overall financial performance, including revenue and costs. | Specified on-pitch squad costs against football-related revenue and the net profit or loss from player sales. |
| Assessment period | A rolling three-year period. | A season-based limit, with in-season monitoring and post-season confirmation. |
| Status in 2026/27 | No longer applies to new seasons; the League retains authority to pursue breaches for seasons ending in 2025/26 or earlier. | In full effect from the start of 2026/27. |
| Levy timing | Not applicable to SCR’s new levy mechanism. | Levies begin for SCR breaches in 2027/28; the League says they are not payable for 2026/27 breaches. |
SCR was monitored in shadow during 2025/26, without enforcement under SCR. That transition did not end the League’s ability to deal with older PSR periods.
What costs and revenue count under SCR?
SCR is not a limit on every expense a club incurs. It includes designated player and head-coach costs and compares them with designated football-related income. The Premier League’s 2026 summary defines the main categories as follows.
Costs included in the squad calculation
- Wages for contracted players and head coaches.
- Agents’ fees.
- Amortisation or impairment of transfer fees. Amortisation allocates a transfer cost across a player’s contract; impairment reflects a reduced value for the registration.
Administrative and commercial employees, assistant coaches and other coaching-team members are excluded from the SCR spending limit, according to the League’s summary.
Revenue included in the calculation
- Club-generated commercial and matchday revenue.
- Net profits from non-football events held 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 calculation described in the League summary.
Because SCR uses specified categories, it should not be read as a simple ratio of all club spending to all club income.
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1Clear out junk files and repair common Windows errors2Fix the driver behind crashes, sound loss and screen glitches3Repair Windows errors before they cause bigger problemsWhy are clubs allowed to go above the 85% limit?
The Premier League calls 85% of football-related revenue plus the net profit or loss from player sales the Green Threshold. It also sets a higher Red Threshold. Every club initially receives an allowance of 30 percentage points above the Green Threshold, including promoted clubs, making the starting Red Threshold 115% of the relevant base. The allowance can later shrink or recover under the rules; unused allowance does not carry into a future season.
That structure means crossing 85% does not by itself trigger a points deduction. A club above Green but below Red may instead face a levy after confirmation, subject to the rules’ tests and levy-offset mechanism. Crossing Red at the main March compliance test triggers a sporting sanction.
How a levy differs from a points deduction
The Premier League’s simplified example calculates a levy using the smaller of the projected in-season overspend and the confirmed post-season overspend, multiplied by the percentage overspend above 85%. The levy is subject to the League’s confirmation and offset rules; it is not the same as the points sanction for exceeding Red.
For a club that exceeds its Red Threshold at the March test, the League summary describes a fixed six-point deduction, with one additional point for each £6.5 million spent above that threshold. These figures describe the Premier League’s published summary of the SCR sanctions, not a general punishment for any overspend above 85%.
When are SCR figures checked?
Clubs and the League agree estimated football-revenue figures at the start of the season for the in-season assessment. The main SCR Compliance Test takes place on 1 March, with monitoring in October. Clubs that are above Green may then be subject to an Accounts Confirmation Test in June using actual figures and a True-Up in October.
Agreeing revenue estimates in advance is intended to reduce exposure to an unexpected revenue fall during the season. It does not make the club’s final position independent of actual results: the post-season confirmation and true-up use actual figures, and an overspend can still have consequences under the applicable tests.
How do clubs regain or lose SCR allowance?
The allowance above Green is a separate mechanism from levy relief. If a club exceeds 85% in its Accounts Confirmation Test, its allowance can decrease. If it returns to compliance in a later season, its allowance may increase by 10 percentage points, up to the 30% maximum.
Prior compliance may reduce or remove a levy under specified conditions, but levy relief does not restore a club’s allowance. The two mechanisms affect different parts of the rules.
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SSR adds three tests intended to assess short-, medium- and long-term financial health. The figures below are those in the Premier League’s 2026 summary.
| Test | Time horizon | What the League summary requires |
|---|---|---|
| Working Capital Test | Short-term | For each calendar month in the season, at least £12.5 million 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 Test | Medium-term | Liquidity headroom for the current and following season must remain 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 Test | Long-term | The Positive Equity Ratio—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 can face additional checks after a Call-In Event. Newly promoted clubs have an additional 31 October assessment for Liquidity and Positive Equity. If a club is non-compliant, the League may require a business plan and steps to restore compliance; possible measures include limits on registering new contracts or a spending limit.
How does SCR apply to promoted clubs?
Promoted clubs start with the same initial 30-percentage-point allowance above the Green Threshold as other clubs, giving them a starting Red Threshold of 115% of the relevant base. Promotion does not create a separate higher starting allowance in the League’s 2026 summary. Promoted clubs also have a 31 October assessment for the SSR Liquidity and Positive Equity tests.
How does the Premier League rule compare with UEFA’s?
UEFA’s squad-cost ratio is 70% of total revenue for clubs governed by its rules, compared with the Premier League’s 85% Green Threshold. The two systems also use different assessment cycles: the Premier League’s SCR is season-based, while UEFA’s assessment operates on a calendar-year basis. A Premier League club playing in European competitions must comply with UEFA’s limit as well as the applicable domestic rules.
The Premier League says its higher threshold is intended to give domestic clubs more room to compete for European qualification and to adjust if they stop qualifying. The 85% and 70% figures are therefore not interchangeable limits: they belong to separate rule systems, and an affected club must meet both.
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