From 2026/27, the Premier League’s financial fair play rules are the Squad Cost Ratio rules and the Sustainability and Systemic Resilience rules. The old Profitability and Sustainability Rules still apply to 2025/26 and earlier seasons.
How the rulebook is split
The 2026/27 Premier League Handbook says the Financial Regulations replaced PSR from 5 June 2026. Those Financial Regulations are split into two parts: SCR in Appendix 2 and SSR in Appendix 3, both fully in force from the start of the 2026/27 season.
PSR covers historic three-season losses, SCR measures squad cost against estimated football revenues, and SSR tests a club’s financial resilience through working capital, liquidity and equity. The 2025/26 season was an SCR transition year, so there were no SCR points deductions and no levies in that season.
The financial rules at a glance
Here is the Premier League financial rule set at a glance.
| Rule | Applies to | Key figures |
|---|---|---|
| Profitability and Sustainability Rules (PSR) | Up to 2025/26 | Losses of no more than £105 million over three seasons |
| Squad Cost Ratio (SCR) | From 2026/27 | Green Threshold 85% of revenues; Red Threshold 85% plus an error margin of up to 30% |
| SCR points deduction | From 2026/27 | Six points plus one point per £6.5 million over the Red Threshold |
| Sustainability and Systemic Resilience (SSR) | From 2026/27 | Working capital, liquidity and positive equity tests |
What PSR measures and when it is filed
PSR is about losses across a rolling three-season period. For 2025/26 and earlier seasons, clubs must submit their PSR figures for 2023/24 to 2025/26 by 31 October 2026. Losses above £105 million across those three seasons are a breach, and the Board can refer that breach to an independent Commission.
The headline limit is reduced if a club spent any of those seasons in the EFL. The reduction is £22 million for each such season, up to £66 million.
The handbook also records recent PSR sanctions. In the final table notes for 2023/24, Everton were deducted six points and then two more for two separate PSR breaches, while Nottingham Forest were deducted four points for one breach.
How SCR works and where the line is drawn
SCR measures a club’s squad cost as a percentage of its estimated football revenues. The Green Threshold is 85% of those revenues, and the Red Threshold is 85% plus the club’s error margin, which is between 0% and 30%. Going above the Red Threshold triggers a points deduction.
In 2026/27, every club has an error margin of 30%, and no levies are charged in that season. Levies for going above the Green Threshold apply only to breaches from 2027/28 onward. A club that stays within the Green Threshold for a whole season gets 10 percentage points added to its error margin, but the cap remains 30%.
Going above the Red Threshold means a deduction of six points, plus one point for every £6.5 million above the threshold, rounded up. If breaches happen in consecutive seasons, the total is multiplied by 1.3 in the second season, 1.6 in the third, and then rises by a further 0.3 for each season after that.
What SSR tests and what failure can bring
SSR does not measure three-year losses or squad cost ratios. It tests whether a club can keep operating and absorb stress through three Board-run checks: working capital, liquidity and positive equity.
The working capital test requires a monthly figure of at least £12.5 million, indexed. The liquidity test requires headroom of zero or more after stress adjustments of £25 million and £60 million, indexed. The positive equity test limits liabilities as a share of adjusted assets to no higher than 90% in 2026/27, 85% in 2027/28 and 80% from 2028/29.
These tests are run on 7 July each year. For promoted clubs, the liquidity and positive equity tests are run on 31 October. If a club keeps failing an SSR test, it can be required, in order, to agree a budget with the Board, obtain Board approval for new contracts for existing players, stay within a spending limit, face refusals of player registrations and then disciplinary action. Failure in the liquidity or positive equity test can also lead to a requirement for extra guaranteed funding.
FAQ
What is PSR in the Premier League?
PSR stands for Profitability and Sustainability Rules. It limits losses over a three-season period and still applies to 2025/26 and earlier seasons, with the 2023/24 to 2025/26 figures due by 31 October 2026.
What is the squad cost ratio in the Premier League?
The squad cost ratio is the share of a club’s estimated football revenues taken up by squad cost. From 2026/27, the Green Threshold is 85% and the Red Threshold is 85% plus the club’s error margin.
What happens if a club breaks the Premier League financial rules?
The outcome depends on which rule has been broken. SCR has a points deduction formula for going above the Red Threshold, SSR can lead to budget control and registration limits, and rule breaches can also be sent to an independent Commission.
What can an independent Commission do?
Under Rule W.64, an independent Commission can impose an unlimited fine and deduct points. The Board has the power to refer cases to that process under the relevant rules.