Unfair Dismissal Compensation Cap Calculator Australia 2026–27

Calculate the statutory compensation ceiling for an unfair dismissal occurring on or after 1 July 2026, then place a user-entered lost-remuneration scenario beneath that ceiling. The page also flags the 21-day filing period, minimum employment period and high-income protection boundary. It cannot decide whether a dismissal was unfair or compensation will be ordered.

What the statutory cap actually limits

The Fair Work Commission states that the compensation cap is the lesser of two amounts: the remuneration received or entitled in the 26 weeks before dismissal, and half the high income threshold immediately before dismissal. For dismissals on or after 1 July 2026, the high income threshold is $190,100, so half is $95,050.

The 26-week input is intentionally separate from weekly pay. Leave, irregular remuneration and Regulation 3.06 can affect the statutory remuneration amount. Use a confirmed payroll or legal calculation rather than automatically multiplying one recent payslip by 26.

The ceiling is not an expected payout

The cap is only the maximum an order can reach after the Commission has decided compensation is appropriate and applied the statutory considerations. Fair Work Commission guidance says most employees receive a much smaller amount; its published material notes a median between five and seven weeks’ pay and that fewer than 0.4% of applicants receive the maximum cap.

The scenario output therefore must not be described as an entitlement, offer value or forecast. It is a way to see whether a stated lost-remuneration theory would be constrained by the legal ceiling. Settlement outcomes can include non-monetary terms and are negotiated under uncertainty.

Unfair dismissal has jurisdictional gateways

A person generally needs to be an employee of a national system employer, complete the minimum employment period, and be protected through income below the threshold or award or enterprise-agreement coverage. Casual service has additional regular-and-systematic and expectation requirements. Fixed-term completion, demotion and resignation can raise dismissal questions.

The three screens cover only time, simple service and the income/instrument boundary. They do not determine national-system coverage, employee status, casual service, whether a dismissal occurred or any other jurisdictional objection.

Minimum employment is six or twelve months

The minimum employment period is six months for an employer with 15 or more employees. It is twelve months for a small business employer with fewer than 15 employees. The headcount can include full-time and part-time employees, regular and systematic casuals, associated entities and employees being dismissed at the time.

Periods of unauthorised absence and some unpaid leave may be excluded from counted service without breaking continuity. A transfer of business can also affect service. The page compares entered calendar months with six or twelve only; confirm the legal count when close to the boundary.

High income does not always remove protection

For dismissals from 1 July 2026, the high income threshold is $190,100. An employee earning at or above the threshold may still be protected if a modern award covers the employment or an enterprise agreement applies. Conversely, simply labelling a job award-free does not prove the conclusion.

“Earnings” for the threshold is a defined measure and is not necessarily taxable income or total remuneration on a marketing package. It can include agreed non-monetary benefits and exclude amounts that cannot be determined in advance and statutory super contributions. Enter a confirmed threshold amount.

The 21-day limit needs immediate attention

An application normally must be lodged within 21 days after dismissal takes effect. The Commission may extend time only in exceptional circumstances. The day count can require attention to the effective date and filing rules; do not wait for internal grievance discussions or a final payment dispute to finish.

The time tile labels 0 to 21 days as within the ordinary window and later values as outside the ordinary window. It does not decide whether an extension is possible. If the deadline is close or passed, contact the Commission or a lawyer immediately.

Compensation follows remuneration loss

The Commission can compensate lost income or remuneration caused by dismissal. The calculation considers how long employment probably would have continued, remuneration lost, income earned, reasonable mitigation, contingencies, misconduct and other statutory matters. It is not a fixed multiple of salary.

The expected-weeks input is one of the most sensitive assumptions. Use evidence about contracts, project duration, performance processes, redundancy plans, business closure or a likely later lawful dismissal. An indefinite assumption can overstate loss even when the original dismissal was unfair.

Mitigation requires reasonable job-seeking conduct

An employee is generally expected to take reasonable steps to reduce loss, such as applying for suitable work. Income earned during the loss period can offset claimed remuneration. The Commission considers the individual evidence and does not require unreasonable steps such as selling possessions or necessarily paying for retraining.

Enter actual or reasonably attributable replacement income in the mitigation field. Keep applications, interviews, offers, rejection emails, new payslips and reasons for declining work. The page subtracts a dollar amount but cannot judge whether conduct was reasonable.

Contingencies and misconduct need evidence

A contingency reduction can reflect uncertainty about future employment or benefits after the assessment period. A misconduct reduction may apply where employee misconduct contributed to dismissal, even if the process or outcome was unfair. The Commission decides the appropriate treatment.

The percentage fields are manual scenario controls. They are applied sequentially after mitigation, so two 10% reductions do not equal a single 20% subtraction from the original gross loss. Do not select percentages merely to imitate a reported case without comparable facts.

Pain and suffering are outside this remedy

The Fair Work Commission expressly explains that unfair-dismissal compensation cannot be ordered for pain and suffering, shock, distress, hurt or humiliation. This page therefore has no non-economic damages field. The pending search intent for pain-and-suffering compensation is not silently folded into this calculation.

Other legal pathways can have different remedies and strict time limits, including general protections, discrimination, workers compensation or contract claims. Overlap and election issues can arise. Obtain legal advice before lodging multiple applications.

Reinstatement and settlement considerations

Reinstatement is the primary remedy where appropriate, with compensation considered when reinstatement is inappropriate. A reinstatement order can include continuity and lost remuneration issues. The calculator only models the compensation cap and cannot value returning to work.

Settlement discussions may cover payment, statement of service, confidentiality, non-disparagement, return of property, references and tax wording. Any amount should be allocated and documented accurately. Tax on a settlement is separate from the statutory cap and may require ETP analysis.

Evidence file

Frequently asked questions