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.[1]
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.[2]
From 1 July 2020, the high income threshold was $153,600 per annum and from 1 July 2021 it is $158,500. Therefore, the compensation cap is:
- $76,800 for a dismissal that occurred on or after 1 July 2020 and before 1 July 2021, and
- $79,250 for a dismissal that occurred on or after 1 July 2021.