Estimate what an employment tribunal could award for unfair dismissal: the fixed basic award plus a compensatory award built from actual lost earnings, the way tribunals work it out. Updated October 2026 for the Employment Rights Act 2025 changes.
Unfair dismissal compensation has two parts. The basic award uses the statutory redundancy formula (up to £22,530 in 2026/27). The compensatory award covers lost net pay and pension, capped at the lower of 52 weeks' gross pay or £123,543 for dismissals before 1 January 2027, when the cap is abolished. The median award is about £6,700.
| Lost net pay | — |
| Lost employer pension | — |
| Less new earnings and notice pay received | — |
| Loss of statutory rights | — |
| Acas and contributory fault adjustments | — |
| Statutory cap | — |
| Compensatory award | — |
| Basic award | — |
| Total estimate | — |
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The basic award uses the same formula as statutory redundancy pay: for each complete year of service (up to 20, counted back from the dismissal date) the employee gets half a week's pay for years under 22, one week for years aged 22 to 40 and one and a half weeks for years aged 41 and over. A week's pay is capped at £751 from 6 April 2026, so the maximum is £22,530. If the employee already received statutory redundancy pay for the same dismissal, it is deducted.
The compensatory award puts the employee back in the financial position they would have been in. It is built from net weekly pay (after tax and NI), lost employer pension contributions and benefits, the expected time to find comparable work, and a small sum for loss of statutory rights. Earnings from a new job and any notice pay already received are deducted.
For dismissals with an effective date before 1 January 2027, it is capped at the lower of 52 weeks' gross pay or £123,543. The Employment Rights Act 2025 removes the cap for dismissals on or after 1 January 2027, and cuts the qualifying service for most claims from two years to six months from the same date. The cap has never applied to dismissals for whistleblowing or certain health and safety reasons.
Ministry of Justice tribunal statistics for April 2023 to March 2024 put the median unfair dismissal award at £6,746 and the mean at £13,749. Most awards are far below the statutory cap because the compensatory award is limited to actual loss, and most people find new work within months. Many claims never reach a hearing and settle through Acas early conciliation or a settlement agreement.
| Figure (2026/27) | Amount |
|---|---|
| Week's pay cap (basic award, redundancy) | £751 |
| Maximum basic award (30 weeks) | £22,530 |
| Compensatory award cap (dismissals before 1 Jan 2027) | £123,543 or 52 weeks' gross pay |
| Compensatory award cap (dismissals from 1 Jan 2027) | None |
| Qualifying service, most claims | 2 years (6 months from 1 Jan 2027) |
| Median unfair dismissal award, 2023/24 | £6,746 |
Awards for the loss of a job fall under the termination payment rules: the first £30,000 is free of income tax and National Insurance, and anything above is taxed as income. Any part that is really unpaid wages, notice or holiday pay is taxed as earnings. The settlement agreement calculator shows the after-tax figure.
Sources: GOV.UK: dismissal compensation; GOV.UK: redundancy pay (£751 cap); Ministry of Justice tribunal statistics; Acas Code of Practice. Reviewed October 2026. General information, not legal advice.
Written and reviewed by James Whitfield and the editorial team.
Every figure is checked against current HMRC and GOV.UK guidance and reviewed for the 2026/27 tax year. We explain the numbers in plain English with worked examples. Editorial standards · About us