Unfair Dismissal Compensation Calculator UK 2026/27 — Basic & Compensatory Award
Unfair dismissal compensation has two components: the basic award (calculated like statutory redundancy pay) and the compensatory award (actual financial losses, capped at £123,543 for 2026/27). This calculator works out both, applies relevant adjustments, and estimates what you might receive at tribunal.
Weekly pay cap 2026/27: £643. Basic award max: £19,290. Compensatory award cap: £123,543 or 52 weeks gross pay (lower of). Time limit: 3 months minus 1 day from dismissal (ACAS early conciliation pauses clock). Polkey deductions, contributory fault, and ACAS uplift/reduction all affect final figure. Results are estimates only.
The Two-Part Award Structure
Unfair dismissal compensation is made up of two parts that are calculated separately then combined:
- Basic award — a fixed formula award based on age, service, and weekly pay. It cannot be increased for any reason but can be reduced if the claimant contributed to their own dismissal or refused an offer of reinstatement.
- Compensatory award — covers actual financial losses and is subject to a cap. It is reduced by Polkey, contributory fault, and failure to mitigate. It can be increased by the ACAS uplift.
Duty to Mitigate
Claimants have a duty to take reasonable steps to find new work. If you do not take reasonable steps (e.g. not applying for jobs, turning down suitable offers), the tribunal will reduce your compensatory award by the earnings you could have received. You must be able to show the steps you have taken to find new work — keep records of all job applications, interviews, and rejections. The tribunal will not penalise you for being unable to find work, only for not trying.
Settlement — Negotiating Before Tribunal
Most unfair dismissal claims settle before reaching a full tribunal hearing, often through ACAS early conciliation or during the proceedings. The settlement value is typically somewhere between the employer’s assessment of their Polkey risk and the claimant’s full award estimate. Factors that strengthen your settlement position: clear procedural failures by the employer; strong evidence of your losses; and the employer’s litigation risk and legal costs.
What Makes a Dismissal "Fair" in the First Place
Not every dismissal is unfair — employers are entitled to dismiss employees for a genuine, fair reason, provided they follow a reasonable process. The five potentially fair reasons recognised in law are: capability (the employee can't do the job to the required standard, whether through skill, aptitude, or health), conduct (misconduct at work), redundancy (the role genuinely no longer exists), a statutory restriction (continuing to employ the person would break the law, such as a driver losing their licence), or "some other substantial reason" — a catch-all category covering situations that don't fit neatly elsewhere, such as a breakdown in working relationships or a business reorganisation. Even where the underlying reason is potentially fair, the dismissal can still be found unfair if the employer didn't follow a reasonable and fair process — for example, skipping a proper investigation, not giving the employee a chance to respond, or not offering a right of appeal.
The Role of ACAS Code Uplifts and Reductions
Employment tribunals expect employers to follow the ACAS Code of Practice on disciplinary and grievance procedures, and failing to do so can significantly affect the compensation awarded, independent of whether the dismissal itself was fair or unfair. If an employer unreasonably failed to follow the ACAS Code — for example, not holding a proper disciplinary hearing or not allowing the employee to be accompanied — the tribunal can increase the compensatory award by up to 25% as a penalty. Conversely, if the employee unreasonably failed to follow the Code themselves, such as refusing to engage with a fair grievance process, the tribunal can reduce the award by up to 25%. This uplift or reduction is applied on top of, not instead of, the standard basic and compensatory award calculation, and can make a meaningful difference to the final amount either way.
Frequently Asked Questions
3 months minus 1 day from the effective date of termination. You must contact ACAS to start early conciliation before the deadline — this pauses the clock. Missing the deadline means your claim will be time-barred and the tribunal has very limited discretion to extend it (only where it was not reasonably practicable to claim in time). Do not delay.
Yes — tribunals can order reinstatement (returning you to your old job as if the dismissal never happened) or re-engagement (returning you to comparable employment with the same employer). In practice, very few reinstatement orders are made because the employment relationship has usually broken down. If an employer refuses to comply with a reinstatement order, an additional compensatory award of up to 52 weeks pay is made, and the case does not go back to court for enforcement.
For ordinary unfair dismissal, yes — you generally need two years' continuous service with your employer before you qualify to claim. However, there are important exceptions where no minimum service is required at all, including dismissals related to whistleblowing, pregnancy or maternity, asserting a statutory right (such as requesting the National Minimum Wage), trade union membership or activities, and several other specific "automatically unfair" reasons. If your dismissal falls into one of these automatically unfair categories, you can claim regardless of how long you'd worked there.
A Polkey reduction (named after a well-known case) allows a tribunal to reduce your compensatory award where it finds that, even if the employer had followed a fair process, there was still a chance you would have been dismissed anyway. For example, if a proper procedure would still have resulted in dismissal on the balance of probabilities, the tribunal might reduce your award by a percentage reflecting that likelihood — so a genuinely unfair process doesn't automatically translate into a full, uncapped compensatory award if the underlying outcome was likely to be the same either way.