SCR keeps spending on players and the head coach within 85% of revenue
From the 2026/27 season the Premier League has switched its financial rules for clubs from PSR (the Profitability and Sustainability Rules) to SCR, the Squad Cost Ratio. Under it, clubs have to keep the cost of their players and head coach within 85% of the revenue they earn from football. A club that goes over the 85% line, the Green Threshold, can face a fine for overspends from 2027/28 onwards, and one that goes over a second, higher line, the Red Threshold, has points deducted. On a literal reading of the rules, that deduction is at least seven points. The first test date is 1 March 2027.
Clubs agreed to it at a shareholders' meeting in November 2025. There were no sanctions in 2025/26, a transition season, and points deductions apply for real from 2026/27. The same meeting also passed a separate rule, SSR (Sustainability and Systemic Resilience), which looks at how much cash a club has to hand and how large its debts are.
Revenue is fixed as an estimate before the season, and sale profits are averaged over about three years
The cost side of the ratio, "Squad Cost", is what a club spends on its contracted players and head coach. As well as basic wages it takes in signing-on payments, image rights payments, employer National Insurance contributions, pensions, termination payments and bonuses. Transfer fees go in as amortisation rather than as the amount paid, and the amortisation is, as a rule, calculated over five years at most (contracts longer than five years signed before 12 December 2023 are an exception). Loan fees and agents' fees count as well. Assistant coaches and the rest of the coaching staff are left out, as are administrative and commercial staff. How amortisation spreads a fee across several years as an expense is covered in our column on transfer accounting.
The revenue side is "Estimated Football Revenues", set before the season starts on the basis of the previous season's figures and other inputs (promoted clubs have a different method). UEFA distribution money only goes in once a club gets through the qualifying stage.
Because revenue is fixed as an estimate, a drop in income during the season doesn't change the 1 March test. A club over the Green Threshold on 1 March has its ratio checked again against its post-season accounts, and that check decides whether it pays a fine and how much.
Profit from selling players also goes into revenue, but not as that season's figure on its own. Profit or loss on sales over roughly three years is added up and divided by three. Even one big sale therefore adds only about a third of its profit to any one season's revenue, with the same profit feeding in over roughly three years. Academy graduates are treated the same way, even though their fee is close to pure profit, so a club can't use one sale to drag that season's ratio down in one go to the extent it could under PSR.
Some income is kept out of revenue altogether. Sales of investments are excluded, and the rules state that this covers selling hotels and similar assets at or near the stadium or training ground. Exceptional income such as a litigation settlement doesn't count, and neither does income from non-football businesses with no link to the club's activities, name or stadium. Under PSR, Chelsea were reported to have sold hotels and their women's team, and Aston Villa their women's team, to associated companies and booked the money as income. Transactions with associated parties that fall under a Fair Market Value assessment and would increase revenue are, as a rule, kept out of the revenue figure until that assessment is done.
The Red Threshold moves up or down with the previous season's ratio
The Green Threshold is 85% of estimated revenue. The Red Threshold sits above it at 85% plus a club-specific allowance, which the rules call the Club Error Margin. The allowance is set somewhere between 0% and 30%, and every club, promoted clubs included, starts at 30%, so the Red Threshold begins at 115%.
The allowance changes from season to season. A club that is over the Green Threshold at the 1 March test and still over 85% in the post-season accounts can have the next season's allowance cut according to how far over it went, even if it stayed short of the line where points come off. Clubs that keep to 85% or below can win back what was cut at 10 percentage points a season, up to the 30% ceiling. Overspending in 2026/27 isn't fined, but the allowance cuts already apply this season. In the 2025/26 transition season, every club's allowance stayed at 30%.
Over the Red Threshold, a literal reading of the rules means at least seven points
A club that is over the Green Threshold at the 1 March test and still over 85% in the post-season accounts may face a fine. The amount depends on how much money it spent above 85% and on how far over 85% its ratio went, and the rules allow it to be reduced for clubs that met the standard in earlier seasons. Fines are payable for overspends from 2027/28 onwards, and relegated clubs have to pay too. The money collected is shared equally among the clubs that met the conditions and stayed within 85%. Other clubs' overspending ends up as a payment to those clubs.
Points come off when a club is over the Red Threshold at the 1 March test. The deduction is a fixed six points plus a variable element: the amount over the Red Threshold divided by £6.5m, rounded up to the next whole number. The league's own explainer puts it as six points to start with, plus one point for every £6.5m. Go over the Red Threshold by a single pound and the variable element is already one point, so on a literal reading of the rules the total can't fall below seven.
Two seasons over the Red Threshold in a row multiplies the deduction by 1.3, and three in a row by 1.6, so the penalty gets heavier the longer the breaches go on.
Points are deducted in the same season as the breach. Clubs can challenge the sanction, and where a dispute could change the points there is an expedited arbitration route meant to settle it within the season as far as possible. If the post-season accounts later put the ratio below the Red Threshold, the points deducted during the season are not given back. The accounts decide the fine and the following season's allowance instead.
SCR looks at one season's ratio at a time, and PSR assessments still run this season
PSR looks at a club's overall profit and loss across three seasons together. SCR looks only at spending on players and the head coach, and compares it with estimated revenue one season at a time.
| PSR | SCR | |
|---|---|---|
| Where a breach starts | As a rule, losses of £105m over three seasons | 85% (Green) and 85% plus the allowance (Red) |
| Selling hotels and similar assets to associated companies | Could be booked as income | Kept out of revenue if it counts as a sale of investments |
| When clubs are assessed | 2023/24 to 2025/26 is the last cycle, assessed as a rule during 2026/27 | Every season, with 1 March as the reference date |
PSR hasn't finished yet either. The final PSR assessment, covering the three seasons from 2023/24 to 2025/26, takes place as a rule during 2026/27 (and can run later if needed), and the deadline for submitting accounts and PSR calculations is 31 October 2026. The league keeps its powers to investigate and sanction breaches in that period, so PSR sanctions are still possible this season.
Clubs in Europe have the same 85% Green Threshold, and unused room can't be carried over
One explainer says the Red Threshold for Champions League clubs is 100% instead of 115%. The rules make no such distinction. The Green Threshold is 85% for every club, the Red Threshold is 85% plus each club's allowance, and there is no separate figure for clubs in European competition. The 70% figure only comes from UEFA's squad cost rule, a separate cap that clubs in Europe also have to meet. UEFA calculates, as a rule, by calendar year and the Premier League by season, so even for the same club the two periods don't line up. The UEFA calculation is set out in our column on UEFA's 70% rule.
"SCR table" comes up as a search suggestion, but the first official test is on 1 March 2027, so any club-by-club table circulating before then is not the league's assessment.
Spending room left unused in a season under 85% can't be carried into the next.
The Championship also moved to SCR from 2026/27. According to the EFL's announcement in May 2026, its version is called the "Squad Cost Rules", the cap is again 85% of income, and owners can add equity on top up to £33m over three seasons, with a maximum of £15m in a single season. It is a separate rule from the Premier League's SCR.
La Liga sets its limit as an amount in advance, and counts a wider range of costs
For anyone following Atlético, the natural comparison is La Liga's LCPD, its squad cost limit. After the summer transfer window, the league sets out the maximum each club can spend during that season. In the 2026/27 list La Liga published in September 2026, Atlético's figure is about €361.29m, third in the top flight behind Real Madrid and Barcelona.
What counts as a cost is close to the reverse of the Premier League. On top of the first-team players and manager, the LCPD covers the assistant manager and fitness coach, plus spending on the reserve team and the youth system. The Premier League's SCR leaves assistant coaches out, and for women's teams and academies it counts their revenue in the denominator while leaving their costs out.
The order of the checks is different as well. La Liga sets each season's spending figure first; the Premier League compares what a club has spent with its estimated revenue and checks the ratio on 1 March and again in the post-season accounts. In both countries, a club playing in Europe, as Atlético do, still has to meet the domestic rules and UEFA's 70% at the same time. How La Liga's limit relates to UEFA's rules is covered in our FFP column.
Seen through La Liga eyes, the Premier League, which judges clubs after they have spent, leaves them more room to decide for themselves than La Liga, where the limit is fixed beforehand. But breaching the threshold carries a heavy penalty: on a literal reading of the rules, a club that goes just over the Red Threshold loses seven points.