Thin surfaced asphalts are designed in a similar manner to spray sealed asphalts considering only rutting as the major mode of failure while there is no consideration for fatigue in the current mechanistic empirical pavement design method adopted by Austroads. However, sprayed seal surfacing are less sensitive to vertical deflection compared to thin surfaced asphalts. Thin surfaced asphalts are commonly prematurely failed by fatigue before any major rutting failure. In this research, the Austroads tolerable deflection criteria was investigated utilizing deflection and cumulative traffic data from 30 thin asphalt pavement sections from Queensland. The data showed that the current Austroads tolerable deflection criterion is largely overestimating the design life of these pavement sections. A new calibrated tolerable deflection criterion was developed. The calibrated tolerable deflection criterion was used with synthetic deflection data and pavement responses generated by multilayer elastic analysis using Circly software for 200 pavement sections to develop a new subgrade criterion. The new subgrade criterion is designed to limit the maximum pavement deflection to be within the calibrated tolerable deflection. By limiting the maximum deflection of the thin asphalt pavements to the new calibrated tolerable deflection, it is expected that surface curvature will be reduced and therefore the fatigue life of these pavements will be significantly improved and it will limit the premature failures of these surfaces. The new criterion produces a stiffer pavement structure compared to the current method. The high stiffness can be achieved by using thicker base course or stabilized bases and subbases structures.