Premier League replaces PSR with SCR rules from 2026/27, introducing points deductions for overspending

The Premier League will operate under an entirely new financial framework from the 2026/27 season, after clubs voted to replace the existing Profitability and Sustainability Rules (PSR) with two new systems: Squad Cost Ratio (SCR) and Sustainability and Systemic Resilience (SSR).

A separate proposal for top-to-bottom “anchoring” — which would have introduced an effective spending cap across all clubs — failed to gather sufficient support and was not passed.

What is SCR?

The Squad Cost Ratio limits clubs’ combined spending on transfers, wages and agent fees to 85 per cent of their football-related revenue and net profit or loss from player sales. The threshold broadly mirrors UEFA’s existing squad cost rules, which carry a stricter ceiling of 70 per cent — a limit that Chelsea and Aston Villa both breached, resulting in fines of €11m and €6m respectively. All Premier League clubs competing in European competition must continue to comply with UEFA’s 70 per cent limit.

Clubs will be permitted some additional headroom beyond the 85 per cent threshold. Initially, a club may exceed it up to 115 per cent in a single season, but doing so triggers a financial levy and reduces their available headroom by an equivalent margin the following year.

Once a club crosses what the Premier League terms the “Red Threshold”, sporting sanctions apply. The base penalty is a six-point deduction, rising by one additional point for every £6.5m spent beyond that level.

What is SSR?

The Sustainability and Systemic Resilience framework applies three financial tests throughout the season, designed to assess a club’s short, medium and long-term financial health. Clubs must demonstrate a credible business plan and show they are not carrying unreasonably high levels of debt — in essence, a safeguard against clubs collapsing if they suffer a sudden loss of revenue.

Unlike the SCR, the SSR is not primarily punitive. The Premier League has said its focus will be on monitoring and helping clubs return to compliance rather than imposing sporting sanctions. However, the league reserves the right to block clubs from registering new contracts or impose a spending limit on any club that remains non-compliant.

The Premier League said the dual framework was introduced “to promote the opportunity for all of its clubs to aspire to greater success, while protecting the competitive balance and compelling nature of the League”.