Goodbye PSR: how the Premier League's new spending rules actually work

The rules that decided points deductions in recent seasons are gone. Since the start of the 2026/27 season, Premier League clubs have been judged on a new test: squad cost ratio, or SCR.

It replaced the Profitability and Sustainability Rules (PSR), which measured how much money a club lost over three years. SCR asks a simpler question: what share of a club’s income goes on its squad?

The 85% line

Under SCR, a club’s squad costs are capped at 85% of its football revenue, adjusted for net profit or loss on player sales.

Squad costs means the money spent on the playing side:

• Player wages
• Transfer fees, spread across the length of a player’s contract
• Agents’ fees paid on signings and contract talks

Revenue means what the club earns from football, such as broadcasting, matchday income and commercial deals. Profit on selling players is added in, and a loss is taken off.

So a club with £300m of football revenue and no player-sale profit would have a squad budget of around £255m under the 85% line.

Room to go over, at a price

The 85% figure is not a hard wall. Clubs have a multi-year allowance of 30 percentage points that they can use to spend above 85%.

Using that allowance is not free. Clubs that dip into it pay a levy. Once the allowance is used up, they must get back under 85% or face a sporting sanction.

In practice, that means a club can push towards 115% for a while, for example to chase a title or a European place, but it pays for the privilege and cannot keep doing it.

Why the league changed

PSR was built around losses. Clubs were allowed to lose up to £105m over three seasons, and breaches led to points deductions.

SCR links spending to income each season instead. The Premier League says the new system brings it closer to UEFA’s rules, which already use a squad cost ratio.

Alongside SCR, clubs voted in a second set of rules called Sustainability and Systemic Resilience (SSR). These check a club’s financial health through tests on working capital, liquidity and positive equity: in plain terms, whether the club can pay its bills and is not built on debt.

A close vote

Clubs approved SCR on 21 November 2025 by 14 votes to six. That was just enough for the two-thirds majority needed for a rule change.

A more radical idea was thrown out at the same meeting. “Top-to-bottom anchoring” would have capped every club’s spending at five times the central payments earned by the club that finished bottom the season before. The players’ union, the PFA, argued it amounted to a salary cap and had threatened legal action. Only seven clubs backed it.

Playing in Europe? There is a second test

UEFA runs its own squad cost ratio for clubs in its competitions, and its limit is tighter at 70%.

That means Premier League clubs in the Champions League, Europa League or Conference League must meet both: 85% at home and 70% in Europe.

UEFA has already shown it will enforce its rule. In July it fined four Premier League clubs, Aston Villa, Chelsea, Newcastle and Nottingham Forest, for breaching its squad cost limit.

What it means for fans

For supporters, the biggest change is how spending power is measured. Under PSR, a club’s owners could plan around a three-year loss limit. Under SCR, what a club can spend rises and falls with what it earns.

That favours clubs with big stadiums, global commercial deals and regular European nights. Clubs with smaller incomes have less room, even if their owners are willing to put money in.

Selling players still matters. Profit on sales counts towards the revenue side, so the summer academy sale is not going away.

The full detail sits in the Premier League Handbook, and the first proper test comes when clubs report their numbers against the new limits. Until then, the headline is simple: spend what you earn, and pay up if you go over.