SCR glossary: every term explained

The Squad Cost Ratio caps what a club spends on its squad — wages, transfer amortisation and agents' fees — at 85% of adjusted football revenue, the Green Threshold. The Premier League adds a 115% Red Threshold beyond which points are deducted, built from a 30% allowance that ratchets down after a breach, while League One clubs still run under SCMP's 50% wages-to-turnover cap.

Every term below links to a fuller definition: what it means, how it is calculated, and where it bites.

Squad cost: Squad cost is the figure measured by the Squad Cost Ratio: player and head-coach wages, plus player transfer amortisation and impairment, plus agents' fees.
Amortisation: Amortisation is the annual accounting cost of a transfer fee, spread evenly across the length of the player's contract.
Impairment: Impairment is an extra write-down of a player's remaining book value when the club no longer expects to recover it, and it counts towards squad cost alongside amortisation.
Agents' fees: Agents' fees are payments a club makes to intermediaries on transfers and contract renewals, and they count towards squad cost under SCR.
Adjusted football revenue: Adjusted football revenue is the denominator of the Squad Cost Ratio: football income plus profit or loss on player sales, including stadium-hosted non-football events and excluding asset sales to owner-linked entities.
Green Threshold: The Green Threshold is the compliance line under SCR: squad cost of no more than 85% of adjusted football revenue, in both the Premier League and the Championship.
Red Threshold: The Red Threshold is the Premier League's hard limit under SCR — the Green Threshold of 85% plus the club's own allowance, which starts at 30% and can shrink after a breach.
Levy: The levy is the Premier League's financial charge on squad cost between the 85% Green Threshold and the club's Red Threshold, deferred until 2027/28.
Feedback Loop (ratchet): The Feedback Loop is the Premier League mechanism that cuts a club's SCR allowance by the size of any breach of the 85% Green Threshold, then rebuilds it at 10 percentage points a season, capped at 30%.
SCR Compliance Test: The SCR Compliance Test is the Premier League's in-season check of a club's projected Squad Cost Ratio, run on 1 March so that it captures the January transfer window.
Accounts Confirmation Test: The Accounts Confirmation Test is the Premier League's post-season check of the Squad Cost Ratio against audited accounts, run in June, and it is the test that sets Feedback Loop allowance cuts.
SSR (Sustainability and Systemic Resilience): SSR is the Premier League's Sustainability and Systemic Resilience framework, a set of financial resilience tests on matters such as liquidity, going concern and balance-sheet strength that sit alongside SCR rather than replacing it.
Owner top-up (equity allowance): The owner top-up is the Championship's equity allowance under SCR: an owner may fund squad cost above the 85% limit by up to £16m in a season, and no more than £34.3m across any rolling three-year window.
Additional Reporting Threshold (95%): The Additional Reporting Threshold is the Championship's 95% trigger: a club projecting or exceeding a squad cost ratio of 95% must self-notify the EFL and accept enhanced reporting requirements.
Business plan: A business plan is the budget and forecast a club must agree with the EFL when it is over a reporting threshold or in breach, setting out how it will return to compliance.
Embargo: An embargo is the EFL's in-season sanction that stops a club registering new players, or limits it to registrations within set conditions, until it is compliant again.
Club Financial Review Panel: The Club Financial Review Panel is the EFL's independent panel that considers clubs referred for financial rule breaches and decides what conditions or sanctions should follow.
SCMP (Salary Cost Management Protocol): SCMP is the EFL's spending rule for League One and League Two: player wages are capped at 50% of turnover, rising to 65% for clubs recently relegated from the Championship, with breaches punished by a registration embargo.
Parachute payments: Parachute payments are the Premier League's post-relegation payments to a relegated club, worth 55%, 45% and 20% of an equal share of central broadcast money, with the third year paid only to a club that spent more than one season in the Premier League.
PSR (Profitability and Sustainability Rules): PSR is the loss-based system that SCR replaces from 2026/27: it capped a club's losses over a rolling three-year period at £105m in the Premier League and £39m in the Championship.
Anchoring: Anchoring was a proposed Premier League rule that would have capped every club's squad cost at five times the central broadcast and commercial distribution paid to the bottom club; clubs rejected it on 21 November 2025 by 7 votes to 12.
Independent Football Regulator (IFR): The Independent Football Regulator is the statutory body created by the Football Governance Act 2025 to license the 116 clubs in the top five tiers of English men's football from the 2027/28 season.

How to use this glossary

The terms are ordered from the mechanics of the calculation — squad cost, amortisation, adjusted football revenue — through the thresholds that judge it, then the tests, sanctions and the rules SCR replaced. If you are starting cold, read squad cost and adjusted football revenue first: they are the numerator and the denominator of every ratio on this site.

Each definition names the competition it applies to. A rule that binds a Premier League club often does not bind a Championship one, and League One is a different regime altogether.

Full SCR rules explainer →

Definitions summarise published EFL and Premier League regulations in plain English; they are not legal advice and not a substitute for the rulebooks themselves. Last reviewed 2026-10-02. SCR explained → Methodology →