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 2022, the high income threshold was $162,000 per annum and from 1 July 2023 it is $167,500. Therefore, the compensation cap is:
- $81,000 for a dismissal that occurred on or after 1 July 2022 and before 1 July 2023, and
- $83,750 for a dismissal that occurred on or after 1 July 2023.