The unfair dismissal compensation cap explained
The cap, the most an unfair dismissal order can cost an employer, is $95,050 for a dismissal on or after 1 July 2026. Very few awards come near it: the Fair Work Commission publishes a median of between 5 and 7 weeks' pay, and fewer than 0.4% of applicants receive the maximum.
The compensation cap, the most an unfair dismissal order can cost an employer, is $95,050 for a dismissal on or after 1 July 2026, according to the Fair Work Commission, up from $91,550 the year before. It rises each 1 July, alongside the high income threshold it is partly calculated from.
The formula: whichever amount is lower
Section 392 of the Fair Work Act sets the cap as the lesser of two amounts: the remuneration the person received, or was entitled to receive, in the 26 weeks before the dismissal, or half the high income threshold immediately before the dismissal. "Whichever is lower" is the operative phrase; someone on a modest income has their cap set by the 26-weeks limb, while someone earning well above the threshold has it capped by the half-threshold limb instead.
A ceiling, not an estimate
This figure is the most an order can award, not a typical award and not an estimate for any individual reader. The Commission calculates actual compensation from a person's proven economic loss, using the four-part formula covered on the how-compensation-is-calculated guide. The Commission's own published figure for what most people actually receive sits well below this ceiling: the median award is between 5 and 7 weeks' pay, and fewer than 0.4% of applicants ever receive the cap itself. No page on this site converts that median into a dollar figure, because the Commission publishes it only as a range of weeks' pay, not a dollar amount.