Unfair dismissal compensation calculator
Estimate the basic award and the compensatory award a tribunal could make. Updated for the £751 week's pay cap from April 2026 and the removal of the compensation cap from 1 January 2027.
Unfair dismissal compensation limits
| Employment ended | Cap on a week's pay | Compensatory award cap |
|---|---|---|
| 6 April 2025 to 5 April 2026 | £719 | £118,223 or 52 weeks' pay if lower |
| 6 April 2026 to 31 December 2026 | £751 | £123,543 or 52 weeks' pay if lower |
| 1 January 2027 onwards | £751* | No cap |
How the two awards work
Basic award
The basic award uses the same formula as statutory redundancy pay. It counts up to 20 full years of service backwards from the end date, and multiplies a week's pay by 1.5 for years aged 41 or over, 1 for years aged 22 to 40 and 0.5 for younger years. If you received a statutory redundancy payment, it is usually deducted from the basic award.
Compensatory award
The compensatory award is meant to put you back in the financial position you would have been in. It covers take-home pay lost while you look for work, any shortfall if your new job pays less, lost pension contributions and a sum for loss of statutory rights. The tribunal decides what is just and equitable, so it may limit the period of loss.
Worked example: the 2027 change
An employee aged 45 earning £1,500 a week gross and £1,100 take-home and £60 a week in employer pension is dismissed after eight years and is out of work for two years. Their losses come to about £121,000. If the job ended in November 2026, the compensatory award is capped at 52 weeks' gross pay, £78,000. If it ended in January 2027, the full loss can be awarded. Use the examples above to see both results.
Frequently asked questions
How is unfair dismissal compensation calculated?
A tribunal usually awards two parts. The basic award is a fixed formula based on age, years of service and weekly pay, like statutory redundancy pay. The compensatory award covers your actual financial loss, such as lost wages and pension, from the dismissal until you find new work or for as long as the tribunal thinks is fair.
What is the maximum award for unfair dismissal?
For dismissals between 6 April 2026 and 31 December 2026, the compensatory award is capped at £123,543 or 52 weeks' gross pay, whichever is lower. The basic award is limited by the £751 cap on a week's pay and a maximum of 20 years' service, so at most £22,530. For dismissals on or after 1 January 2027 the compensatory award has no cap.
Is unfair dismissal compensation uncapped from 2027?
Yes. The Employment Rights Act 2025 removes both the fixed cap and the 52 weeks' pay limit on the compensatory award. The change applies where the actual end date of employment is on or after 1 January 2027. Unpaid notice does not move this date for the cap.
How is the basic award calculated?
Count back up to 20 full years of service from the end date. You get one and a half weeks' pay for each year in which you were 41 or older, one week for each year aged 22 to 40, and half a week for each year under 22. A week's pay is your gross pay, capped at £751 from 6 April 2026.
What is the average payout for unfair dismissal in the UK?
There is no typical figure, because awards depend mainly on your pay and how long you are out of work. The Ministry of Justice publishes yearly tribunal statistics with the median and average awards. The median is much lower than the average, because a few very large awards pull the average up. Many claims settle through Acas before a hearing.
What is the award for loss of statutory rights?
Tribunals usually add a modest fixed sum, typically a few hundred pounds, because you lose the employment protections you had built up and must start again with a new employer.
Can my award be reduced?
Yes. The tribunal can reduce the award if you contributed to your dismissal, did not try hard enough to find new work, or would probably have been dismissed fairly anyway. It can also raise or lower the award by up to 25% if either side unreasonably failed to follow the Acas Code of Practice. This calculator does not apply those adjustments.
Can I claim unfair dismissal under 2 years?
For dismissals on or after 1 January 2027 you need only six months' service. Before then you need two years, unless the dismissal was for an automatically unfair reason such as whistleblowing or pregnancy. Check with the qualifying period calculator.
Sources
- Employment Rights Act 1996, section 119 (basic award)
- Section 123 (compensatory award) and section 124 (limit)
- Employment Rights (Increase of Limits) Order 2026, in force 6 April 2026
This calculator gives general guidance based on the Employment Rights Act 1996 as amended by the Employment Rights Act 2025. It does not cover every situation and is not legal advice. For your own case, speak to Acas, a trade union, Citizens Advice or an employment solicitor. Time limits for tribunal claims are short, so act quickly.