How is unfair dismissal compensation calculated in Australia?

The Fair Work Commission uses the "Sprigg formula" (from Sprigg v Paul's Licensed Festival Supermarket (1998) 88 IR 21) under s.392 of the Fair Work Act 2009. It: (1) estimates the remuneration you would have earned but for the dismissal (your weekly wage × how long you'd likely have stayed); (2) deducts money you've earned since the dismissal (mitigation); (3) deducts income you're reasonably likely to earn in that period; (4) applies a discount for contingencies (commonly around 25%); (5) reduces the amount for any misconduct on your part (s.392(3)); and (6) caps the result at the lesser of 26 weeks' pay or half the high income threshold — $95,050 for 2026-27. No amount is added for shock, distress or humiliation (s.392(4)).

What is the maximum unfair dismissal payout for 2026-27?

The maximum unfair dismissal compensation for a dismissal on or after 1 July 2026 is the lesser of 26 weeks' pay or half the high income threshold. The high income threshold for 2026-27 is $190,100, so the absolute cap is $95,050 (Fair Work Commission). For most employees the 26-weeks-of-pay limb is the binding cap, because half the high income threshold is only reached by those earning over $190,100 a year.

How much is a typical unfair dismissal payout?

Most payouts are well below the cap. The median settlement reached at Fair Work Commission conciliation is roughly $8,704, and around 72% of settlements are under $10,000. Where a matter runs all the way to a formal hearing, the median compensation ordered is about 7 weeks' pay (approximately $7,797). Large awards near the $95,050 cap are uncommon and usually involve long service, dismissal without warning, and genuine difficulty finding new work (FWC data / annual reports).

Is it worth claiming unfair dismissal?

It depends on your loss and your circumstances. The application fee is modest and about 78% of unfair dismissal matters resolve at conciliation without a hearing, so many claims are settled quickly for a few weeks' pay. But compensation is purely economic — if you found a comparable job soon after the dismissal your loss (and therefore any payout) may be small, even if the dismissal was clearly unfair. Reinstatement, not compensation, is the primary remedy under the Act, though it is ordered in under 5% of cases. Check your eligibility and the strict 21-day deadline before committing.

How long do I have to lodge an unfair dismissal claim?

You must lodge your application with the Fair Work Commission within 21 calendar days of the dismissal taking effect. This is a strict deadline — extensions are only granted in exceptional circumstances. The clock starts on the day your dismissal takes effect (usually your last day), not the day you were told.

Does unfair dismissal compensation include payment for stress or humiliation?

No. Section 392(4) of the Fair Work Act 2009 expressly excludes any component for shock, distress, humiliation or other hurt caused by the manner of the dismissal. Unfair dismissal compensation is limited to economic loss — lost remuneration — not general or punitive damages.

Unfair Dismissal Payout Calculator

Estimate your unfair dismissal compensation using the Fair Work Commission's Sprigg formula. See the full 7-step breakdown, the 26-week / $95,050 cap, and how it compares with real FWC case outcomes. Free, employee-side, not legal advice.

Last verified: 4 July 2026

Applies the Fair Work Commission's Sprigg formula (s.392 Fair Work Act) to estimate unfair dismissal compensation, capped at the lesser of 26 weeks' pay or $95,050 for 2026-27. Estimate only — not legal advice.

How is your wage figure expressed?

Weekly

Base wage per week (before tax)

Annual

Base salary per year (before tax)

Base weekly wage*

Your ordinary base pay, excluding overtime and most penalties.

Length of continuous service (years)*

years

Used for context. You generally need 6 months' service (12 months if the employer has under 15 staff) to be eligible.

Months you would likely have stayed but for the dismissal*

months

Step 1 of the FWC's Sprigg formula — the anticipated period of further employment.

Earnings since dismissal (to date)

Wages you've already earned from new work — deducted as mitigation (s.392(2)(e)).

Income reasonably likely to be earned in that period

Further income you're likely to earn over the anticipated period — also deducted (s.392(2)(f)).

Contingency discount

Step 4 — a discount for the chance events would have cut the employment short anyway. The FWC commonly applies around 25%.

Misconduct reduction

s.392(3) — a reduction if your own conduct contributed to the dismissal. Leave at 0% if not relevant.

How the estimate works

This calculator applies the Fair Work Commission's standard “Sprigg formula” (from Sprigg v Paul's Licensed Festival Supermarket (1998) 88 IR 21), the approach the FWC uses to assess compensation under section 392 of the Fair Work Act 2009 (Cth). It estimates the remuneration you would have earned but for the dismissal, deducts what you have earned (and are likely to earn) since, discounts for contingencies, reduces for any misconduct, and applies the statutory cap — the lesser of 26 weeks' pay or $95,050 for 2026-27 (half the $190,100 high income threshold, per the FWC). No amount is included for shock, distress or humiliation (s.392(4)).

What real outcomes look like

The cap is a ceiling, not a typical result. The median settlement at FWC conciliation is about $8,704, and roughly 72% of settlements are under $10,000. About 78% of matters settle at conciliation rather than proceeding to a hearing; where they do proceed, the median compensation ordered is around 7 weeks' pay. Reinstatement — not compensation — is the primary remedy under the Act, but it is ordered in under 5% of cases (FWC data and annual reports). See real, published decisions and the amounts actually ordered in our case law library. Figures here are before tax: compensation is an employment termination payment, while unpaid wages and leave in a settlement are taxed differently. Work out the tax on each part with the ETP Tax Calculator.

Before you rely on this

This is an estimate only and not legal advice — real outcomes vary widely and turn on evidence and specific facts. First confirm you are eligible and inside the strict 21-day deadline with the Unfair Dismissal Checker. Not sure which claim fits your situation? Try Which Workplace Claim Is Yours? or the General Protections Checker. Heading to conciliation? Prepare with FWC Conciliation Prep.

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Send your details to Liquid Employment Lawyers

Liquid Employment Lawyers is a paid legal service and our referral partner, not free Fair Work advice. Tell them what has happened and a member of their team will call you back. For free general guidance, use our tools or call the Fair Work Ombudsman on 13 13 94.

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General information and estimates only — not legal, financial or tax advice. Always check your specific award, agreement or contract, or a qualified professional, before you rely on the result.