Everything you need to know as Premier League clubs have blocked the introduction of a salary cap, but approved new financial measures to replace the current Profit and Sustainability Rules
The Premier League trophy on display as clubs vote on new financial rules
The Premier League trophy on display as clubs vote on new financial rules(Image: Michael Regan - The FA/The FA via Getty Images)
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What you need to know about the new financial rules coming to the Premier League
Premier League clubs voted decisively against the controversial proposal known as Top-to-Bottom Anchoring (TBA). This measure would have functioned as a hard salary cap, limiting every club's spending based on the lowest-earning team's revenue distribution.
A major overhaul of spending rules was approved with the implementation of the new Squad Cost Ratio (SCR) guidelines. This new system is set to replace the current Profitability and Sustainability Rules (PSR), which have recently led to sanctions against clubs.
The SCR regulations will cap a club's on-pitch expenditure at 85% of its total football revenue plus net profit from player sales. This limit governs "football costs," which include player wages, transfer fee amortisation, and coaching staff expenses.
Clubs are provided with a multi-year allowance of 30% that they can use to exceed the primary 85% spending threshold. However, clubs utilizing this flexibility will incur a financial levy, and exhausting the full allowance will result in a sporting sanction.
The new Premier League SCR rules bring the division's financial system closer to the model already employed by UEFA. While UEFA's equivalent rules operate with a stricter 70% threshold, the 85% Premier League limit aims for similar financial prudence.
The shareholders also voted unanimously in favour of the new Sustainability and Systemic Resilience (SSR) rules. This system is designed to provide comprehensive monitoring of a club's financial health across short, medium, and long-term horizons.
The SSR rules mandate that clubs must undergo three specific financial health assessments to ensure stability. These crucial tests are the Working Capital Test, the Liquidity Test, and the Positive Equity Test.
These newly approved financial control systems, SCR and SSR, are slated to officially come into effect at the start of the 2026/27 season. The old Profitability and Sustainability Rules will remain active for the duration of the current 2025/26 campaign.