See Fair Work Act 2009 s.392(5) and (6)
Orders for compensation will be reduced if the amount exceeds the compensation cap. The compensation cap is the lesser of:
- the amount of remuneration received by the person, or that they were entitled to receive (whichever is higher) in the 26 weeks before the dismissal, or
- half the amount of the high income threshold immediately before the dismissal.
If the employee was on leave or was not receiving full pay, the amount of remuneration will be calculated with reference to reg 3.06 of the Fair Work Regulations.
From 1 July 2021, the high income threshold was $158,500 per annum and from 1 July 2022 it is $162,000. Therefore, the compensation cap is:
- $79,250 for a dismissal that occurred on or after 1 July 2021 and before 1 July 2022, and
- $81,000 for a dismissal that occurred on or after 1 July 2022.