Clubs in League One and League Two have voted in favour of squad salary caps which take effect immediately, the English Football League has announced.
It is understood 22 League Two clubs were in favour of a cap, with two against.
The EFL said the cap would cover basic wages, taxes, bonuses, image rights, agents' fees and other fees and expenses paid directly or indirectly to all registered players.
Promotion bonuses or incentives payable for success in cup competitions will not be included, the EFL said, and any income generated from players going out on loan is deducted from the club's salary cap calculation.
A statement read: "Clubs in League One and League Two have today voted for the introduction of new financial controls in the form of ‘Squad Salary Caps’ into their respective divisions which take effect immediately.
"The decision follows extensive and comprehensive consultation with all Clubs in respect of addressing sustainability and wage inflation issues across the EFL which were initiated prior to the suspension of football in March following the COVID-19 outbreak and have continued during the course of the summer.
"Those discussions culminated in today’s divisional vote, with representatives of League One and League Two Clubs opting to implement the new measures in place of the existing Salary Cost Management Protocols (SCMP), with fixed caps of £2.5million and £1.5million respectively.
"Discussions continue with Championship Clubs in respect to amendments to their own financial controls. League One and Two Clubs are also going to continue discussions towards the introduction of additional measures aimed at addressing Club financial sustainability."
EFL CEO, David Baldwin said: “The term ‘salary cap’ is an emotive one, creating the impression of a restrictive measure but we are clear in our view that this is neither the objective nor the likely effect of these changes to EFL Regulations. The financial impact of Covid-19 will be profound for EFL Clubs and today’s vote will help ensure Clubs cannot extend themselves to the point that could cause financial instability.
“Over the last two weeks the discussions amongst Clubs in both Leagues One and Two have been healthy and constructive, allowing us to reach a clear consensus today and I am pleased that the Clubs have determined to adopt the new approach. We will now work with all Clubs, the PFA and, where appropriate, other stakeholders to implement the new rules and continue our efforts to bring long-term sustainability to the EFL.”
