Premier League Financial Fair Play Rules 2026/27: SCR, PSR Changes & Points Deductions

Important: These are simplified reference figures. The governing rules and club-specific calculations determine the applicable denominator, thresholds and any sanction. The Premier League’s official guide sets out the assessment process.

The Squad Cost Ratio compares the costs of building and running the senior playing squad with the club’s relevant football income. It is not a ceiling on how much money an owner can have, and it is not a fixed salary cap applying in pounds to all 20 clubs.

In practice, the official regulations define which revenues and expenses qualify, including accounting adjustments and transfer-related figures. For supporters, the simplified ratio answers the useful question: how much of a club’s football income is tied up in its playing squad?

Because clubs have different revenues, the same £150m annual squad cost could leave one club comfortably under its green threshold but another above it. The league’s system focuses on this relationship rather than applying one uniform transfer budget.

What counts as squad cost?

• Player wages and relevant bonuses.
• Head coach wages.
• Agent/intermediary costs within the regulatory calculation.
• Transfer-fee amortisation and relevant impairment charges, according to the rules.

Assistant coaches, administrative and commercial staff are not included in the SCR’s defined squad costs in the same way as players and the head coach. The Premier League says costs of women’s teams and youth academies are excluded from the SCR expense calculation, while their relevant income is included. That is designed to avoid discouraging investment in those areas.

What counts as football-related revenue?

The qualifying income can include commercial deals, matchday income, league distributions and revenue from football competitions. Relevant net profit or loss on player sales is included as well. A fee announced in a transfer headline is not necessarily the same as the accounting profit made from that sale.

Imagine three fictional clubs each have a £200m qualifying income base after the relevant player-sale adjustment. These are illustrations, not reported finances for real Premier League teams.

The green threshold is £200m × 85% = £170m. If the club still has its full initial allowance, the red threshold is £200m × 115% = £230m.

Why Club B is the interesting case: A 95% ratio is 10 percentage points above green, but it is not automatically a points-deduction offence while the applicable red threshold is 115%. If the overspend is confirmed through the required assessments, it can reduce the club’s next-season allowance. Levies for SCR breaches do not begin until the 2027/28 season.

Why Club C is different: If its applicable red line is 115% at the 1 March test, 120% sits beyond that limit. The league’s sporting-sanction mechanism is therefore relevant. The actual calculation uses approved financial information and the detailed rulebook—not this simplified table.

The league uses a green threshold and a red threshold for different purposes:

There is no permanently fixed 115% safe zone. Every club initially receives a 30-percentage-point allowance, but this changes when confirmed excess spending feeds back into the following season. The allowance can fall to zero, leaving the red line at 85%.

For an SCR red-threshold breach, the Premier League describes a points-deduction formula starting with a six-point deduction, increasing by one point for each £6.5m spent above the red threshold. The specific sanction must be calculated under the full rules and can be subject to appeal. This is a separate mechanism from historical enforcement cases. For example, our earlier report on Haaland and Manchester City’s 115 financial charges concerns allegations under previous rules. The number of charges should not be confused with the new SCR system’s initial 115% red threshold.

The allowance is intended to make the system less rigid when a club invests ahead of future revenue or its finances fluctuate. But it is not a free pass to exceed 85% every year.

Example over two seasons:

1. Season 1: A fictional club records a confirmed SCR of 100%. That is 15 percentage points above 85%.
2. Season 2: Its initial 30-point allowance is reduced by 15 points, leaving 15 points of headroom and a 100% red threshold.
3. If its Season 2 SCR is 101% at the relevant compliance test, it would now be over its 100% red threshold—even though 101% was below the original 115% figure.

This reduction is the Premier League’s negative feedback loop. A club that returns to compliance can restore a previously reduced allowance through a positive feedback loop, adding 10 percentage points at a time up to the 30-point maximum. Unused allowance is not carried forward as a growing cash reserve.

The takeaway: For future seasons, always ask what a club’s current red threshold is, not simply whether it is below 115%.

Fans still search for Premier League FFP or Premier League PSR, but those terms are not interchangeable with the league’s current framework.

The old PSR no longer governs new-season compliance from 2026/27. However, the Premier League retains the power to investigate and enforce alleged PSR breaches relating to 2025/26 or earlier. That is why a future news story mentioning a PSR case would not necessarily contradict the introduction of SCR.

This financial reform is a different subject from referee and match regulations. For gameplay changes, read our Premier League 2026/27 rule changes guide.

A £50m signing does not necessarily add £50m to the club’s squad-cost ratio in the year the transfer happens. Football accounting normally spreads an eligible transfer fee across the player’s contract as amortisation, subject to the relevant regulatory rules.

Take a purely fictional signing:

Bonuses, agent fees, impairments, contract changes and accounting restrictions can change the final figure, so £18m should not be treated as a full regulatory calculation.

What if the club sells a player?

A £40m transfer sale is not automatically a £40m accounting profit. If the departing player’s remaining registration value is £15m, a basic illustration would produce a £25m profit before related costs. The transfer can also remove future wages and amortisation. Both the profit/loss on player trading and future squad expenses may affect SCR, but not always in the way suggested by the public headline fee.

This is why two clubs with similar gross transfer spending can end a season with very different ratios.

The Premier League performs monitoring during the season, rather than relying exclusively on a post-season accounts review.

• October 2026: in-season monitoring during the first full SCR season.
• 1 March 2027: SCR compliance test after the winter transfer window; exceeding the applicable red threshold can trigger a sporting sanction during that season.
• June 2027: accounts confirmation test for clubs above the green threshold.
• October 2027: accounts confirmation true-up for relevant clubs, helping establish confirmed actual costs and any resulting effect on future allowance.

Transition detail: Although SCR is active in 2026/27, the Premier League says financial levies are only payable for breaches in 2027/28 and later seasons. Sporting sanctions under the current SCR regime are not deferred in the same way. Levies, when applicable, are finally determined after the season following the required accounts process, subject to the detailed offset provisions.

Clubs are entitled to challenge relevant decisions under the applicable appeals process. The final result depends on the facts and the official rules, not on a press estimate of a club’s transfer spending.

SCR measures on-pitch spending. SSR looks at whether the club can stay financially healthy. The Premier League introduced three separate tests to assess short-, medium- and long-term financial resilience.

The calculations include detailed definitions and adjustments. For example, the league’s liquidity model includes part of the squad’s market value in qualifying liquid assets; it is not simply a bank-balance test.

The main SSR assessment takes place on 7 July, with additional assessments possible after a call-in event. Newly promoted clubs have different initial timing for some tests. Where an SSR test is failed, the focus is initially on a satisfactory business plan and steps to restore compliance. Further monitoring, spending limits, contract-approval requirements or disciplinary measures can follow if necessary.

Clubs competing in UEFA tournaments can face two different sets of squad-cost requirements: the domestic Premier League framework and UEFA’s financial-sustainability rules. Passing one does not automatically mean passing the other.

For instance, an illustrative ratio of 78% is below the Premier League’s 85% green line but above UEFA’s 70% limit. That does not prove the club breached UEFA rules—the competitions use distinct regulatory definitions and calculations—but it shows why a European participant must budget for both systems.

UEFA’s current Article 94 squad-cost rule specifies the 70% ceiling. For a comparison with a different domestic approach, our LaLiga salary cap and 1:1 rule guide explains how registration capacity works in Spain.

The financial consequences can now be easier to understand if you follow four questions instead of looking at a headline transfer budget alone:

1. What is the qualifying revenue base? A club with larger recurring income may sustain a larger annual squad cost while remaining below 85%.
2. What does the squad cost each season? Existing wages, amortisation and agents’ costs matter alongside the new arrivals.
3. How much allowance remains? A club may be under 115% but above its own reduced red threshold after an earlier confirmed overspend.
4. Is the club also in Europe? UEFA’s separate 70% limit may be the tighter constraint.

There is also a reason to pay attention to contract renewals and player sales. Lowering annual wages, reducing future amortisation or creating qualifying sale profit can change the ratio even without a spectacular incoming signing.

The biggest mistake is assuming a rich owner can simply deposit money and ignore these controls. The system uses specified revenues, costs and financial-health tests, so funding availability and regulatory capacity are different questions.

The key change in Premier League financial fair play is not simply that an old £-loss test has become a new percentage. The league now measures on-pitch spending against revenue, tracks the position during the season and uses a green/red-threshold system with an allowance that can change from year to year. SSR separately checks whether clubs can withstand financial stress.

Before concluding a club is “breaking FFP”, look for its actual applicable threshold, whether an official compliance test has taken place, whether the claim relates to SCR, SSR, an old PSR case or UEFA rules, and what the league has formally decided. Headline transfer fees alone cannot answer those questions.

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