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In 2025-26, the Premier League and Championship trialled squad-cost ratio (SCR) rules on a shadow basis to see how a spending cap tied to a percentage of each club’s revenue would function.
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From 2026-27, SCR is permanently in place, replacing the previous profit and sustainability rules (PSR).
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UEFA applies a 70% SCR cap for its competitions, so Premier League clubs in Europe must comply with that limit.
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The Premier League sets an 85% cap of total revenue for all clubs, whether or not they play in Europe.
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Clubs may spend above 85% by using a rolling, multi-year allowance of 30%, enabling investment ahead of revenue or to offset variability and sporting underperformance.
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Every club starts the season with 85% plus the 30% allowance, effectively 115%.
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Example: if a club spends 105% in 2026-27, it uses 20% of its allowance; its maximum spend before possible sporting sanction in 2027-28 then falls to 95%.
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If a club spends under 85%, it can restore its allowance back up to the full 30%.
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Spending above 85% but within the allowance triggers a financial penalty. Exceeding both the 85% cap and the allowance brings a fixed six-point deduction, plus one extra point for every £6.5m spent beyond 115%.
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An “anchoring” mechanism—tying spending to a multiple of the bottom club’s income—was trialled in 2025-26 but rejected by Premier League clubs.
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SCR was approved by a vote of 14 to six and introduced alongside sustainability and systemic resilience (SSR) regulations.
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SSR applies three in-season tests:
- Working capital test: evaluates short-term cash resources
- Liquidity test: evaluates medium-term liquidity and resilience
- Positive equity test: evaluates long-term financial health
- Together, SCR and SSR aim to make competition more balanced by curbing excessive player spending by the richest owners and freeing all clubs to invest in areas such as stadium infrastructure.
August6August 6, 2026