Why use this calculator
Deciding whether to bring an employment tribunal claim, or whether to accept a settlement offer, is one of the more consequential financial decisions a dismissed employee makes, and it is usually made without any clear sense of what the claim is worth. An offer of twelve thousand pounds sounds generous until you work out that the basic award alone is eight thousand.
This calculator separates the two halves of an unfair dismissal award so you can see them independently: the basic award, which is fixed by statute and depends only on age, service and capped weekly pay, and the compensatory award, which depends entirely on what you actually lost and how quickly you found new work.
Employers use the same arithmetic in reverse to price their exposure before a hearing, and advisers use it to set a realistic settlement range rather than an aspirational one.
How to use it
- Enter your gross weekly pay before tax, taken from the twelve weeks before the dismissal rather than from your contract, since overtime and commission count.
- Give your complete years of continuous service and your age on the day employment ended, because service worked after your forty-first birthday earns half as much again.
- Enter how many weeks you have already been out of work, then how many more weeks of loss you realistically expect.
- If you have started a new job, enter its gross weekly pay so only the shortfall is counted as loss.
- Finally, say whether the dismissal was for an automatically unfair reason, which removes the qualifying service requirement and applies a minimum basic award.
What each result means
- Total estimated award
- The basic and compensatory awards added together, before any percentage adjustments a tribunal may apply for procedure or fault. Treat it as the midpoint of a range, not a promise.
- Service still needed to qualify
- How much more continuous service you would need for an ordinary unfair dismissal claim, which requires two years. It does not apply where the reason for dismissal is automatically unfair, such as whistleblowing or pregnancy.
- Room before the compensatory limit
- How much further your assessed loss could grow before the compensatory award hits its limit, the lower of 52 weeks' gross pay and the statutory cap. Loss above the limit cannot be recovered however long you are out of work.
- Award above the tax-free allowance
- The part of the estimated award above the £30,000 tax-free allowance for payments on termination of employment. That part is taxed as employment income, so the cash you receive will be lower. Any arrears of pay or notice pay inside the award are taxed in full whatever the total.
- Basic award
- A fixed statutory sum calculated exactly like redundancy pay. It is payable even if you suffered no financial loss at all, and it is not reduced by new earnings.
- Compensatory award
- Compensation for what the dismissal actually cost you in lost pay and benefits, after the statutory limit is applied. This is the part you must evidence.
- Weeks of pay in the basic award
- How many weeks' pay your age and service have earned. The maximum is 30 weeks, reached by 20 years of service worked entirely after your 41st birthday.
- Capped weekly pay used
- The weekly figure applied to the basic award. If it is below your real pay, the statutory cap of £751 has bitten and the extra is simply ignored.
- Assessed financial loss
- Your claimed loss before any cap: past shortfall, future shortfall and loss of statutory rights. Compare it to the award to see how much the cap removed.
- Compensatory award limited by
- Which constraint set your compensatory award. If it says the statutory cap, extra evidence of loss will not increase the award any further.
- Qualifying service met
- Whether you have the two years of continuous service an ordinary unfair dismissal claim requires. Automatically unfair reasons need no qualifying period at all.
The formula
Basic award = capped weekly pay x weeks earned
Capped weekly pay is the lower of your actual gross weekly pay and £751, and the basic award itself cannot exceed £22,530.
Compensatory award = (gross weekly pay minus new weekly pay) x weeks of past and future loss, plus £600 for loss of statutory rights, limited to the lower of 52 weeks' gross pay or £123,543
Total = basic award + compensatory award
How this number is used in practice
Most unfair dismissal claims never reach a hearing. Acas early conciliation is a mandatory step before a claim can be filed, and a large majority of cases settle during or shortly after it. The number this calculator produces is most useful as the anchor for that conversation.
An employer facing a thirty thousand pound exposure plus its own legal costs and several weeks of management time has a strong commercial reason to settle at a figure below the full award, and knowing where the award sits stops you accepting an offer that is a fraction of it.
Two adjustments regularly move the final figure and neither is in the arithmetic above. A tribunal can increase or decrease the award by up to twenty-five per cent where either side unreasonably failed to follow the Acas Code of Practice on disciplinary and grievance procedures, which most often bites on employers who dismissed without a hearing or an appeal.
A Polkey reduction cuts the compensatory award by the percentage chance you would have been dismissed anyway had a fair procedure been followed, and in a genuine redundancy dismissed through a flawed process that reduction can be severe. Contributory fault reduces the award further where your own conduct played a part.
The duty to mitigate matters more than most claimants expect. You are required to take reasonable steps to find comparable work, and an employer who can show you turned down a suitable offer or made no applications will argue the loss should stop at the point you could have been back in work.
Keep a dated record of every application, interview and rejection from the week of dismissal, because that record is the evidence that supports the future loss half of the claim.
Worked examples
A 45-year-old earning £750 a week with 6 years' service, 20 weeks out of work and 13 more expected
Basic award of £6,000 from 8 weeks' entitlement, plus a compensatory award of £25,350, giving £31,350 in total
A 58-year-old earning £1,400 a week with 25 years' service, out of work 40 weeks
Basic award of £21,403.50 from 28.5 weeks at the capped £751 rate, with the compensatory award limited to £72,800 by the 52-week rule
A 30-year-old earning £600 a week who found a £500 a week job after 8 weeks
Only the £100 weekly shortfall counts, so the compensatory award falls to roughly £2,700 rather than the full salary
When people use it
- Deciding whether a settlement offer made during Acas early conciliation is worth accepting
- Working out whether a claim is financially worth the time and stress before starting conciliation
- Employers pricing their exposure before deciding to defend a claim or settle it
- Solicitors and advisers setting a realistic settlement range for a client
- HR teams sense-checking a proposed settlement agreement against the statutory entitlement
Tips
- You normally need two years of continuous service. Dismissal for whistleblowing, union activity, pregnancy or asserting a statutory right needs none.
- You must contact Acas to start early conciliation within three months less one day of the dismissal date. Miss it and the claim is usually dead regardless of merit.
- The basic award is paid whether or not you lost money, so a claimant who walked straight into a better job still recovers it.
- Keep every job application, rejection and recruiter email. Failure to mitigate is the most common way a compensatory award gets cut.
- A settlement agreement usually pays the first £30,000 of genuine compensation tax free, which can make a slightly lower settlement worth more in the hand than a tribunal award.
- If the real complaint is discrimination rather than dismissal, say so. Discrimination claims have no cap and include injury to feelings.
What it assumes, and where it stops being accurate
- Uses the statutory limits in force from 6 April 2026. A dismissal before that date is governed by the previous year's lower limits.
- Assumes ordinary unfair dismissal unless you select an automatically unfair reason. Whistleblowing and health and safety dismissals have no compensatory cap at all.
- No Acas Code uplift, Polkey reduction or contributory fault deduction is applied, though any of the three can move the award by a quarter or more.
- Pension loss, lost benefits in kind and expenses of looking for work are not included, and can add materially to a long-service claim.
- Assumes continuous employment with one employer. Transfers under TUPE and associated employers preserve continuity, which this does not model.
- Loss of statutory rights is taken at the conventional £600. Tribunals award between roughly £400 and £600 depending on the case.
Terms used on this page
- Basic award
- The statutory element of an unfair dismissal award, calculated from age, service and capped weekly pay.
- Compensatory award
- Compensation for actual financial loss caused by the dismissal, subject to the statutory cap.
- Effective date of termination
- The legal date employment ended, which starts the three-month clock for bringing a claim.
- Polkey reduction
- A percentage cut to the compensatory award reflecting the chance of dismissal even after a fair procedure.
- Mitigation
- The claimant's duty to take reasonable steps to find new work, which limits recoverable future loss.
Questions people ask
- What is the difference between the basic and compensatory award?
- The basic award is a statutory sum based only on age, length of service and capped weekly pay, calculated exactly like redundancy pay and payable even if you lost no money. The compensatory award covers actual financial loss, mainly lost earnings and benefits, and must be evidenced and mitigated.
- Can the compensatory award exceed £123,543?
- Not for an ordinary unfair dismissal. The cap is the lower of £123,543 or 52 weeks' gross pay, so most claimants are limited by their own salary first. The cap does not apply at all to dismissals for whistleblowing or for health and safety reasons, and discrimination claims are uncapped.
- How long do I have to bring a claim?
- You must notify Acas and start early conciliation within three months less one day of the effective date of termination. The clock pauses during conciliation and you then get at least a month to file. Tribunals rarely extend this deadline for unfair dismissal.
- Does finding a new job reduce my compensation?
- It reduces the compensatory award, because that award compensates actual loss and your loss stops when comparable pay resumes. If the new job pays less, only the shortfall counts. The basic award is unaffected by new earnings and is paid in full.
- What is a Polkey reduction?
- Where a dismissal was procedurally unfair but you would probably have been dismissed anyway had a fair process been followed, the tribunal reduces the compensatory award by the percentage chance of that outcome. In a genuine redundancy handled through a flawed consultation the reduction is often substantial.
- Is a tribunal award taxable?
- The first £30,000 of a genuine compensation payment for loss of employment is normally free of income tax, with the balance taxed as employment income. Payments that are really contractual, such as pay in lieu of notice or unpaid wages, are taxable in full from the first pound.
Use this with
Unfair Dismissal Compensation Calculator answers one part of the question. These pick up where it stops: Statutory Redundancy Pay Calculator, Constructive Dismissal Compensation Calculator, Notice Period Pay Calculator and Employment Tribunal Cost Estimator.
Where these figures come from
Figures and rules on this page follow United Kingdom law.
- The Employment Rights (Increase of Limits) Order 2026. The statutory instrument setting the limits used here, in force 6 April 2026
- GOV.UK: Calculate your statutory redundancy pay. Official redundancy entitlement tool and the age-banded weeks table
- GOV.UK: Redundancy: your rights. Week's pay cap of £751 and the £22,530 maximum
- Acas: Dismissals. Fair procedure, the Acas Code of Practice and the 25% uplift
- Employment Rights Act 1996, Part X and XI. Statutory basis for unfair dismissal, redundancy pay and notice
- GOV.UK: Employment tribunals. Time limits, Acas early conciliation and the hearing process
Unfair Dismissal Compensation Calculator produces an estimate for general information. It is not financial, tax, medical, legal or engineering advice. read the full disclaimer. Spotted a wrong number? Report it and it gets fixed. The form picks up this calculator and the inputs you used.