The Hidden Economics of Player Development: Training Compensation Explained

05 Feb 2026

By David Winnie, Partner, Head of Sports and Immigration, Gilson Gray

To promote talent development and competitive balance in world football, clubs must have meaningful incentives to invest in young players. Training compensation is one such mechanism. Whether it has fully achieved its aims is debatable, but its purpose is clear: to reward clubs for developing players, encourage investment in youth systems, and support a fairer distribution of resources across the game. But how does it actually work?

What Is Training Compensation?

Distinct from Solidarity payments, training compensation is a mandatory payment made to clubs that trained a player between the ages of 12 and 21. It becomes payable when a player signs their first professional contract, or when they are transferred internationally before the end of the calendar year in which they turn 23.

FIFA’s Framework

For international transfers, training compensation is governed by FIFA’s Regulations on the Status and Transfer of Players. The amount payable is linked to the training costs the new club would have incurred had it developed the player itself.

Rather than calculating individual costs for each player, FIFA categorises clubs into four tiers (Categories 1-4), based on the quality and cost of their youth development programmes. Each category is assigned a flat annual training cost. In broad terms, a transfer to a higher-category club results in higher training compensation.

While the calculation is automatically generated through FIFA’s Clearing House when a transfer or loan is registered, the underlying rules contain some less obvious adjustments. For example:

• Training between the ages of 12-15 is always calculated using Category 4 rates, regardless of the club’s actual category; and
• Where a player trained at a Category 3 or 4 club and moves to a higher-category club, 75% of any amount exceeding the training club’s category costs is redistributed pro rata to all clubs that trained the player from age 12 onwards.

Domestic Training Compensation in England

FIFA’s regime applies only to international transfers. In England, domestic disputes involving players under 24 are governed by the FA’s Compensation Fee Tribunal.

Under FA Rules, where a player under 24 declines an offer of re-engagement and signs for another English club, the clubs must agree a compensation fee. Failing agreement, the tribunal will determine the fee, which is final and binding.

The tribunal considers factors similar to FIFA’s framework, including:

• The status of the clubs;
• The player’s age; and
• The level of development provided.

However, it goes further by also assessing:

• Any transfer fee paid;
• The player’s contract terms and playing record;
• Medical, rehabilitation and other non-training costs; and
• Whether the clubs made genuine efforts to reach agreement.

Final Thoughts

Despite the mandatory nature of training compensation, parties can, in certain circumstances, contract out of these obligations or protect their entitlements through carefully drafted transfer and loan agreements, including appropriate waivers from training clubs.

Understanding your rights and obligations around training compensation – both internationally and domestically – is more important than ever. Gilson Gray’s Sports team regularly advises clubs, players and agents on these issues.

If you would like to discuss this further, please contact David Winnie or Louis Francis.

Find out more about our Sports services here.