EFL Championship: Squad Cost Rules replace the £39M P&S limit

Updated: 2026-11-09

Official league rule — modeled in Zelador

Championship clubs no longer plan against a £39M three-year loss allowance. From the 2026/27 season, Squad Cost Rules cap player and manager costs at 85% of income, with a flexible owner equity top-up of £33M across three years and no more than £15M in any one season. Clubs approved the change on 15 May 2026 by 20 votes to 4, after shadow-running the ratio alongside P&S through 2025/26. The two regimes are different in kind: P&S added up losses after the fact, SCR is a live ratio you can breach in the middle of a window.

Squad Cost Rules (EFL)EFL

Check	Limit	Detail
Squad Cost Rules (SCR)	≤ 85%	Shown against the full squad cost (wages, amortisation and agent fees). SCR measures player and manager costs against income — enter your wage bill separately for the exact test.
Equity top-up	—	Owners may add a flexible £33M of equity across three years, capped at £15M in any one season, on top of the 85%.
Replaced P&S	—	SCR replaced the £39M three-year Profitability and Sustainability loss limit from 2026/27, approved by Championship clubs on 15 May 2026. A live ratio, not a retrospective cumulative total — a club’s P&S history does not carry into the SCR test.
Financial resilience (IFR)	—	The IFR licenses on an assessed financial plan, not a numeric spending limit — a deficit here flags resilience questions the plan must answer; it is not a breach.
IFR provisional licence	—	Every club in the top five tiers of English football must hold a provisional IFR licence ahead of 2027/28. Final licensing rules were published on 1 July 2026.
Licence application documents	—	Applying requires a financial plan, a strategic business plan, a personnel statement and a corporate governance statement. A provisional licence runs up to three years while the club works toward a full licence.

Timeline

Squad Cost Rules in force from 2026/27 · player and manager costs within 85% of income · £33M equity top-up over three years, max £15M per season · replaced the £39M P&S limit.

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Frequently asked questions

What is the Championship spending limit now?

Player and manager costs within 85% of income, from the 2026/27 season, under Squad Cost Rules. Owners may add a flexible £33M of equity across three years, capped at £15M in a single season.

Is the £39M P&S limit still in force?

No. Squad Cost Rules replaced Profitability and Sustainability from 2026/27. Earlier seasons were assessed under P&S, but the £39M three-year loss limit does not govern the current season.

Does a club’s P&S history carry into the new test?

Not directly. P&S measured aggregate losses backwards across three seasons; SCR measures a cost ratio against income in the season itself. A club that was close to the old limit does not start the new rule with less room.

Are PSR, P&S and Squad Cost Rules the same thing?

No, and the names get mixed up constantly. PSR was the Premier League test, a £105M three-year loss limit. The Championship ran Profitability and Sustainability, a £39M three-year loss limit. Both are gone: from 2026/27 the Championship runs Squad Cost Rules at 85% of income and the Premier League runs its own Squad Cost Ratio. An article quoting £39M or £105M as a current limit is quoting a dead rule.

What counts against the 85% ratio?

Player and manager costs together, measured against income in the season itself. That is the structural change from P&S: a loss total was assessed after the fact, across three years; a cost ratio moves with every signing, in the window where the signing happens.

How does Zelador Football help?

It keeps the squad cost ratio visible against the 85% line as the season runs, models the equity top-up separately from trading income, and simulates a signing or a renewal before you commit to it.

How does the new IFR licence interact with Squad Cost Rules?

They stack. From 2027/28 Championship clubs need a provisional Independent Football Regulator licence, applied for with a financial plan among other documents, on top of staying inside the 85% ratio. Final IFR rules were published on 1 July 2026.

When does the IFR licence application window open?

Applications for the provisional licence open at the start of November 2026 and close on 26 February 2027, ahead of the 2027/28 season. The financial plan is part of the application, so a Championship club is effectively preparing two tests at once: the plan the regulator reads and the 85% ratio the EFL enforces.