The Premier League transfer levy is 4%. The paying club owes it on a compensation fee, contingent sum, international loan fee or a payment under rule U.39, worked out net of VAT where relevant, and the money goes to the players' pension scheme.
When the levy applies
Here are the cases in which the 4% levy applies.
| Payment | Levy due |
|---|---|
| Compensation fee | 4% of the sum paid, net of value added tax |
| Contingent sum | 4% of the sum paid |
| International loan fee | 4% of the sum paid |
| Loan fee on its own | None |
| Loan that turns permanent during the loan or within four months of its expiry | 4% of the loan fee and compensation fee added together |
| A player's registration or other non-financial consideration | 4% of the value both clubs attribute to each player who moves |
The basic rule is simple: the club making the payment pays the levy to the league. A standalone loan fee is outside the charge, but that changes if the registration is transferred permanently within the period set by the rule.
When it falls due
The levy is payable immediately when a club pays a compensation fee, contingent sum, international loan fee or a payment under rule U.39. Where VAT is part of the transaction, the levy is calculated on the amount net of VAT.
Instalments do not spread the levy across later dates when the underlying payment is a compensation fee or an international loan fee. The levy on the whole amount is paid up front when the transferee club applies to register the player concerned.
Special cases that change the calculation
When a loan becomes permanent
A loan fee by itself carries no levy. If the player's registration moves permanently from the transferor club to the transferee club during the loan, or within four months after the loan ends, the league charges 4% on the loan fee and compensation fee added together.
That rule deals with the charge only. It does not set out when a loan may happen or how a loan agreement works in other respects.
When part of the deal is not cash
If the consideration includes another player's registration or some other non-financial consideration or value in kind, both clubs must give a financial value to each player who moves and include it in the transfer agreement. The levy is then paid at 4% of that attributed value in each case.
If the board considers an attributed value materially below the player's true transfer value, and that would reduce the levy due, it will require the transferor club to restate the declared transfer value and may use its power under rule V.12.
Where the money goes
The levy received by the league is used first to pay the premiums due under the Professional Footballers' Pension Scheme. That is the primary destination of the money collected through this charge.
Any surplus left after those pension premiums have been paid is added to the Professional Game Youth Fund.
FAQ
Does the Premier League take a cut of transfer fees?
Yes. The league charges a 4% levy in the cases covered by the rules, and the paying club is the one that owes it.
The charge is wider than a basic transfer fee because it also reaches contingent sums, international loan fees and certain non-cash consideration.
Who pays the Premier League transfer levy?
The club making the relevant payment pays it to the league. That covers payments such as a compensation fee, contingent sum, international loan fee or a payment under rule U.39.
Is there a levy on loan fees in the Premier League?
A loan fee on its own has no levy, while an international loan fee is charged at 4% of the sum paid. The position on a plain loan fee changes only if the registration is transferred permanently during the loan or within four months of its expiry, when the levy is charged on the combined loan fee and compensation fee.
What is the Premier League transfer levy used for?
It is used to pay the premiums due under the Professional Footballers' Pension Scheme. If money is left after those premiums are paid, the surplus goes to the Professional Game Youth Fund.