Premier League Wage Bills and Wage to Turnover Ratios
Premier League wage bills explained: what staff costs include, the wage to turnover ratio English clubs are judged on, and what relegation does.
By CricketTaken EditorialPublished Football Money20 min read
- Maximum wage abolished
- 1961
- Maximum wage when it went
- £20 a week
- UEFA squad cost limit
- 70% of revenue
- Where the figures are filed
- Companies House
In January 1961 the maximum wage in English football was £20 a week during the season. Jimmy Hill, then chairman of the Professional Footballers' Association, had a strike ballot behind him, and the Football League folded before it was tested. Within weeks Johnny Haynes at Fulham was on £100 a week and the ceiling that had capped every professional in the country for the better part of sixty years was gone. Two years later George Eastham won his case against Newcastle United and the retain-and-transfer system, which allowed a club to hold a player's registration after his contract expired, was ruled an unreasonable restraint of trade.
Everything about how English clubs pay players descends from those two decisions. Wages became a market price, and a market price with no ceiling on it consumes whatever revenue arrives — which is why the Premier League's broadcast income, the largest in club football, has translated into the largest wage bills in club football rather than into profit.
This page deals with what a wage bill contains, how it is measured against revenue, what happens to it when a club goes down, and how to read the real number out of the accounts rather than out of a website that has estimated it.
What sits inside a wage bill besides the players
The number reported in a club's accounts is not the players' wages. It is staff costs, and it covers everyone the club employs.
That includes the first-team squad, the manager and his coaching staff, the academy from the under-nines upwards, the medical and sports science departments, analysts, scouts, the recruitment operation, groundstaff, retail and ticketing employees, the catering staff who work matchdays, administrators, and the executives. A large Premier League club employs several hundred people. Only a small fraction of them play.
The staff costs note in a set of accounts usually breaks into three lines:
- Wages and salaries — gross pay including bonuses, signing-on fees recognised in the period, and in most cases the club's payments in respect of image rights arrangements.
- Social security costs — employer's National Insurance, which for high earners is a substantial addition on top of the salary itself.
- Pension costs — normally the smallest of the three at a football club, given the age profile and career length.
Add them together and you have the figure the press calls the wage bill. It is bigger than the amount paid to footballers, and clubs do not generally split out the playing squad separately, which is precisely why comparing a filed figure at one club against a leaked playing-squad number at another produces nonsense.
Two things sit just outside the wage bill and are constantly confused with it. Agent fees are not wages; they are a separate cost, and the way they are treated is set out in football agent fees in England. Transfer fees are not wages either; they are capitalised and written down over the contract, which is the subject of amortisation in football accounting. The three together make up most of what a squad costs, and only one of them is the wage bill.
Compensation to sacked managers and coaches is a further complication. Some clubs disclose it separately as an exceptional item, some fold it into staff costs, and a season with two dismissals can therefore inflate an apparently comparable figure.
- Basic salariesContracted weekly pay for the first-team squad, coaching staff and every other employee of the club.
- Signing-on feesLump sums promised on signature, usually paid in instalments across the contract and recognised as they accrue.
- Performance bonusesAppearance, goal, clean sheet, win and league-position payments earned during the year.
- Image rights paymentsSums paid under separate agreements for commercial use of a player's likeness, where such arrangements exist.
- Loyalty and milestone paymentsAmounts triggered by reaching a defined date or appearance total while still registered with the club.
- Employer's National InsuranceThe club's own contribution on all of the above, a material addition at Premier League salary levels.
- Pension contributionsEmployer contributions, the smallest element of the three-line staff costs note.
The components of the staff costs figure reported in filed accounts. The order reflects how the number is built up, not the relative size of each component.
Wage to turnover, and the ratio a board actually watches
Divide staff costs by turnover and you have the single most useful number in football finance. It answers the question that matters: how much of what comes in is already committed before the club does anything else at all.
Around 70 per cent has been the conventional warning line for a long time, used by UEFA in its licensing work and by the accountancy firms that publish annual reviews of the game's finances. It is not a legal limit in England and no English competition enforces it as a hard rule. It is a rule of thumb, and like most rules of thumb it is right more often than it is wrong.
Below roughly 60 per cent a club has genuine slack. It can absorb a bad season, miss out on European qualification, and still cover its other costs from operating income.
Between 60 and 80 per cent is where most of the Premier League lives, and the position within that band tells you how much of the club's model depends on things it does not control.
Above 80 per cent something else has to balance the books — player trading profits, owner funding, or qualification for a competition the club has not yet qualified for. Wage bills above turnover have happened in English football, more than once, and they are the reliable early signal of an insolvency event two or three years later.
The ratio has a flaw worth naming. Turnover for a Premier League club includes broadcast money that arrives regardless of performance, matchday income that is fairly predictable, and commercial income that is largely contracted. That is stable revenue, so a high ratio is less dangerous than the same ratio at a club whose income depends on prize money or on selling players. The number is a starting point for the question rather than the answer to it.
UEFA moved past the ratio for clubs in its competitions, replacing the old break-even test with a squad cost rule that measures wages, transfer amortisation and agent fees together against revenue, phased down over three seasons.
Wages and league position, the strongest relationship in the sport
If you had one variable to predict a Premier League table with, you would take the wage bill and you would not agonise over it. The relationship between what clubs pay and where they finish is stronger than the relationship with transfer spending, stronger than possession statistics, and stronger than anything a manager brings.
The reason is not complicated. Transfer fees measure what a club paid for a player at one moment, sometimes years earlier and sometimes to a desperate seller. Wages measure what the whole market thinks that player is worth right now, updated continuously, across the entire squad. A free transfer on high wages is a good player. A club-record signing on modest wages generally is not.
The relationship is not perfect, and the gap between prediction and outcome is where the interesting football lives. Clubs finish above their wage rank by recruiting undervalued profiles, by coaching, and by having a settled squad in a division where most squads are not settled. Clubs finish below it by paying for reputation, by carrying long contracts for players who have declined, and by changing manager often enough that no recruitment strategy survives.
Sustained overperformance against the wage rank is rare and it is always the same story underneath: a recruitment department that identifies players before the market prices them, and a wage structure disciplined enough that nobody in the dressing room is being paid for what they did three years ago.
Sustained underperformance is more common and easier to diagnose. It is usually a long tail of contracts signed by a previous regime.
The lag that hides the relationship
One reason the correlation looks weaker than it is comes down to timing. A wage bill reported in accounts covers a financial year that has already finished, and it reflects decisions taken in windows before that. A club that has just been taken over and has spent heavily will show a wage bill consistent with its ambition roughly a year after the results start arriving, not before.
The opposite lag is more painful. A club that has cut its wage bill has usually done so by losing its best players, and the league position follows the departures rather than the accounts. By the time the improved ratio is filed, the sporting consequence is already visible in the table.
Anyone testing the relationship should therefore compare a wage bill against the season it was actually paid for, not against the season the accounts happened to be published in. That single adjustment tightens the correlation considerably.
Bonuses, appearance money and the part of pay that is not salary
Basic salary is the headline, and at some clubs it is barely half the story.
Appearance money attaches to being in the squad or on the pitch, sometimes with a threshold — a payment per appearance once a defined number of starts has passed. It shifts risk. A club paying a lower basic with high appearance money is protected if the player is injured or does not get in the side.
Goal and assist bonuses are common for forwards, clean sheet bonuses for defenders and goalkeepers. Win bonuses, once near-universal in English football, have become less standard at the top and remain widespread further down.
League position bonuses are the most consequential category and the least discussed. A squad-wide payment triggered by a top-four finish, by European qualification, or by survival can move a club's staff costs by a meaningful amount in a single afternoon in May. It also means two clubs with identical contracts can report different wage bills purely because one of them finished sixth.
Signing-on fees are lump sums promised at signature and paid in instalments across the contract. They are wages, they are taxed as wages, and they are one reason a player's reported weekly figure and his actual annual earnings diverge.
Then there are image rights. A club may contract separately for the commercial use of a player's likeness, paying a company rather than the individual. The arrangement is legitimate where the commercial activity is real and the sums are proportionate to it. HMRC has taken a close and sustained interest in cases where it is neither, and the treatment of these payments has been a running feature of tax enquiries into English clubs.
Loyalty payments, triggered by still being at the club on a set date, complete the picture. They are also the clause that makes a January sale awkward, because a player leaving three weeks before the trigger date is walking away from money the club would otherwise owe him.
Relegation clauses and the promotion ratchet
No Premier League rule reduces wages on relegation. Contracts do it, and only where they say so.
The standard mechanism is a relegation clause cutting the player's pay by an agreed percentage from the point the club goes down. The percentage is negotiated individually. A player with leverage signs a smaller reduction or none at all, and the clause a club manages to insert into a squad player's contract in July is not the one it manages with a target it is competing for in August.
The result is uneven, and the unevenness is the problem. A relegated club does not see its wage bill fall by a uniform percentage. It sees perhaps two-thirds of the squad reduce and the remainder — often the highest paid, because they had the most leverage — stay exactly where they were. Those are also the contracts that are hardest to move on, because a Championship club cannot absorb the wage and a Premier League club will not pay the transfer fee.
The other side of the mechanism runs in reverse. Promotion clauses in Championship contracts increase pay on going up, and squad-wide promotion bonuses are standard. A promoted club's wage bill therefore rises the moment the play-off final ends, before a single signing is made, and the increase applies to players who were assembled for a different division. What that does to a balance sheet is set out in the cost of relegation from the Premier League, and the compensating income arrives through parachute payments, which taper and then stop.
Clubs use three other levers. Selling, which requires a buyer. Loaning out with a wage contribution, which requires the player to agree and rarely removes the whole cost. And mutual termination, which usually means paying up a proportion of the remaining contract in one go — a cash cost now in exchange for a lower run rate later.
Why the second season down is often worse than the first
The first Championship season after relegation is cushioned. Parachute money is at its highest, the reduced contracts are still generating value, and the squad is materially stronger than the division. The second is where clubs come unstuck: parachute income has stepped down, the best players have gone, replacements have been signed on Championship wages that were justified by promotion the club did not achieve, and the wage bill has stopped falling because the easy reductions have already been taken.
The maximum wage, the salary cap, and why English caps keep collapsing
English football has tried to cap pay twice, sixty years apart, and neither attempt survived contact with the law.
The maximum wage held from the Edwardian era until 1961. It was a genuine cap, uniform across the Football League, and it depressed player earnings so far below the value they generated that the game could not defend it once the PFA organised properly.
The second attempt was narrower. In 2020 EFL clubs voted to impose hard annual squad salary caps in League One and League Two, replacing the percentage-of-turnover approach with a cash ceiling. The PFA challenged the way the caps had been introduced, arguing they should have gone through the established negotiating machinery for professional football rather than being imposed by a vote of clubs. An arbitration panel agreed, the caps were struck down, and the divisions reverted to the salary cost management protocol they had used before.
That protocol is still in force in League One and League Two. It limits spending on player wages to a proportion of a club's relevant turnover, is monitored during the season rather than after it, and carries registration embargoes as its enforcement mechanism — a club over the limit cannot sign anybody. It is a soft cap that scales with income, which is why it has survived where a hard cap did not.
The Championship uses profitability and sustainability rules instead, described in the Championship's financial rules. The Premier League has no wage cap at all. Proposals for a squad cost ratio and for anchoring spending to a multiple of the lowest broadcast payment have been discussed among clubs, and the shape of what might eventually be adopted has changed more than once, so the honest position is that the Premier League currently constrains wages only indirectly, through PSR.
The legal obstacle is the same in every case. A group of employers agreeing what they will pay employees is, in competition law terms, a difficult thing to justify, and it becomes harder still when the employees' union has not agreed to it.
The gap between the top flight and the EFL
The wage cliff between the Premier League and the Championship is the widest in European football, and it is a broadcasting artefact.
Premier League central distributions dwarf EFL ones, and the mechanics of that are covered in Premier League TV rights money. Since wages track revenue, the wage gap mirrors the revenue gap almost exactly. A player moving from a mid-table Championship club to a mid-table Premier League club is moving into a different order of pay for the same job, played eighteen miles away.
What makes it dangerous rather than merely striking is that the Championship does not accept the gap. Clubs there pay well beyond what Championship revenue supports, because promotion is worth so much that a wage bill which looks reckless in isolation looks rational as an option premium. Wage-to-turnover ratios in the Championship have routinely run at levels that would be alarming anywhere else, and in some cases above 100 per cent.
Below that, League One and League Two are constrained by the salary cost management protocol and behave more sanely, though the protocol measures a percentage of turnover and a club with weak turnover is capped at a low absolute number, which is not the same as being safe.
The National League is a further step down again, with a mix of full-time and part-time squads and no equivalent central income, as set out in the English football pyramid.
Reading staff costs out of a set of filed accounts
Every English professional club is a company, and companies file accounts. This is the part of football finance that is genuinely open, and almost nobody uses it.
Go to Companies House, find the club's registered company — the name in the accounts is often a holding company rather than the trading name on the shirt — and download the most recent annual report. It is free. There is no registration and no charge.
Then read four things.
Turnover, in the profit and loss account, usually broken into broadcasting, matchday and commercial. Staff costs, in the notes, split into the three lines described above. The average monthly number of employees, disclosed alongside staff costs and often split between playing and non-playing staff — this is what lets you sanity-check a wage bill against headcount. And the intangible assets note, which shows the amortisation charge on player registrations, the other half of what a squad costs.
Divide staff costs by turnover and you have the ratio, calculated on the same basis for every club in England.
Four cautions. Accounting year ends differ between clubs, so a comparison can be straddling different seasons. Group structures vary, and a club that sits inside a larger holding company may report figures that include activities beyond football. Clubs that qualify as small or medium-sized entities file abridged accounts with less detail, which affects most of the lower divisions. And accounts are filed months after the year end, so the newest available figure is always historic — which, for a static reference page, is a feature rather than a problem.
- Find the companySearch Companies House for the club's registered entity, which is often a holding company rather than the trading name.
- Download the accountsTake the most recent annual report and accounts; filings are free and require no account.
- Read turnoverTake the figure from the profit and loss account, noting the split between broadcasting, matchday and commercial income.
- Read staff costsTake wages and salaries, social security and pension costs from the staff costs note and add them together.
- Check headcountCompare against the average monthly number of employees to see how much of the bill is non-playing staff.
- DivideStaff costs over turnover, expressed as a percentage, on the same basis as every other club in England.
- Note the year endConfirm the accounting period before comparing two clubs, because year ends differ across the league.
The sequence for calculating the ratio on a consistent basis. Every step uses documents filed publicly at Companies House.
Squad depth against wage efficiency
Carry a squad of thirty senior professionals and you are paying eight or nine of them to be unavailable for selection on any given weekend. Carry twenty and one bad month in the treatment room ends your season.
The trade-off is genuine and clubs resolve it differently. The Premier League's rules push in a particular direction: a maximum of seventeen non-homegrown players in a twenty-five-man squad, with unlimited under-21s outside it, described in Premier League squad size rules and the homegrown player rule. The under-21 exemption is the lever. A club that promotes from its academy adds depth at academy wages rather than market wages, and the difference across ten squad places is the difference between a comfortable ratio and an uncomfortable one.
Wage efficiency also depends on how pay is distributed within the squad. A flat structure keeps the dressing room calm and makes it hard to sign anyone exceptional. A steep structure — a handful of high earners above a modest base — buys quality at the top and generates resentment underneath, particularly when the flat-rate performers are the ones playing every week.
Most English clubs run a banded structure with defined tiers, precisely to avoid negotiating every contract from first principles. It also gives the club a defensible answer when an agent asks why his client is not on what somebody else is on.
The loan army and what it does to the ratio
A club with a large squad and a network of loans is running a wage bill that does not match its playing squad in either direction. Players out on loan may still be partly paid by the parent club, so they remain in staff costs while contributing nothing on the pitch. Players in on loan may be partly paid by the club that owns them, so they appear on the pitch every week while sitting only fractionally in the accounts.
Compare two clubs with similar squads and materially different loan activity and the wage-to-turnover ratio is measuring different things at each. The EFL loan rules limit how far this can be taken in the Football League, and the Premier League has its own restrictions on loans between clubs in the same competition.
There is a secondary effect that shows up in the accounts of selling clubs. Wage contributions received from a borrowing club are usually netted against staff costs rather than recorded as revenue, so an active loan operation flatters the ratio at both ends of the calculation without changing anything real about the underlying commitment.
Contract length and the commitment it locks in
A five-year contract is a five-year liability. The club may not report it that way — future wage commitments do not sit on the balance sheet as debt — but the obligation is real and it is close to unavoidable.
Long contracts protect a club's asset value. A player with four years remaining commands a fee; a player with one does not, and a player with none leaves for nothing, which is what Bosman and free transfers established. That is the case for length, and it is a strong one.
The case against is that footballers decline, get injured, and lose form, and none of those events shortens a contract. A club that hands a long deal to a twenty-nine-year-old on the strength of one exceptional season is buying two good years and paying for five.
There is a further wrinkle for anyone reading accounts. Contract length also determines the amortisation period for the transfer fee, so a longer contract lowers the annual charge in the accounts even though the total commitment is larger. That interaction — longer deals spreading the transfer cost while extending the wage cost — is why the relationship between contract length and financial risk is not the simple one it appears to be.
Comparing clubs without being misled
Three questions to ask before believing any wage comparison you read.
First, is it the same figure at both clubs? Filed staff costs against filed staff costs is fair. Filed staff costs at one club against an estimated playing-squad figure at another is not, and the second kind of comparison is far more common in circulation than the first.
Second, is it the same period? Accounting year ends differ, and a comparison across a season in which one club was in Europe and the other was not is measuring two different things.
Third, what did the club do that year? A season with two managerial dismissals carries compensation. A season with a promotion carries squad-wide bonuses. A season with an unexpected European run carries qualification payments. None of those tells you much about the club's underlying wage structure.
The tidiest way to use the number is as a ratio rather than as an absolute, and as a trend rather than as a snapshot. A club whose wage-to-turnover ratio has risen for three consecutive years is telling you something, whatever the absolute figure. A club with the fourth-largest wage bill in the division is telling you almost nothing you could not have guessed from its revenue.
More on how the money reaches clubs in the first place sits across the Football Money section, and the wider football coverage is collected at /sports/football.