diff --git a/awx/main/models/ha.py b/awx/main/models/ha.py
index 9d7c956360..dc2fe76e01 100644
--- a/awx/main/models/ha.py
+++ b/awx/main/models/ha.py
@@ -161,6 +161,25 @@ class Instance(HasPolicyEditsMixin, BaseModel):
     def remaining_capacity(self):
         return self.capacity - self.consumed_capacity
 
+    @staticmethod
+    def update_remaining_capacity(instances, jobs):
+        """Takes mapping of hostname to SimpleNamespace instance like objects and a list of jobs.
+
+        Computes remaining capacity for all the instances based on currently running and waiting jobs.
+
+        No return value, updates the "remaining_capacity" field on the SimpleNamespace instance like object in place.
+        For use in the task manager to avoid refetching jobs from the database.
+        """
+        for job in jobs:
+            if job.status not in ['waiting', 'running']:
+                continue
+            control_instance = instances.get(job.controller_node, '')
+            execution_instance = instances.get(job.execution_node, '')
+            if execution_instance and execution_instance.node_type in ('hybrid', 'execution'):
+                instances[job.execution_node].remaining_capacity -= job.task_impact
+            if control_instance and control_instance.node_type in ('hybrid', 'control'):
+                instances[job.controller_node].remaining_capacity -= settings.AWX_CONTROL_NODE_TASK_IMPACT
+
     @property
     def jobs_running(self):
         return UnifiedJob.objects.filter(
diff --git a/awx/main/scheduler/task_manager.py b/awx/main/scheduler/task_manager.py
index 62dace5968..2301f7ec00 100644
--- a/awx/main/scheduler/task_manager.py
+++ b/awx/main/scheduler/task_manager.py
@@ -64,7 +64,7 @@ class TaskManager:
 
         self.time_delta_job_explanation = timedelta(seconds=30)
 
-    def after_lock_init(self):
+    def after_lock_init(self, all_sorted_tasks):
         """
         Init AFTER we know this instance of the task manager will run because the lock is acquired.
         """
@@ -77,7 +77,7 @@ class TaskManager:
             SimpleNamespace(
                 obj=instance,
                 node_type=instance.node_type,
-                remaining_capacity=instance.remaining_capacity,
+                remaining_capacity=instance.capacity,  # Updated with Instance.update_remaining_capacity by looking at all active tasks
                 capacity=instance.capacity,
                 hostname=instance.hostname,
             )
@@ -86,6 +86,9 @@ class TaskManager:
 
         instances_by_hostname = {i.hostname: i for i in instances_partial}
 
+        # updates remaining capacity value based on currently running and waiting tasks
+        Instance.update_remaining_capacity(instances_by_hostname, all_sorted_tasks)
+
         for rampart_group in InstanceGroup.objects.prefetch_related('instances'):
             if rampart_group.name == settings.DEFAULT_CONTROL_PLANE_QUEUE_NAME:
                 self.controlplane_ig = rampart_group
@@ -603,7 +606,7 @@ class TaskManager:
         finished_wfjs = []
         all_sorted_tasks = self.get_tasks()
 
-        self.after_lock_init()
+        self.after_lock_init(all_sorted_tasks)
 
         if len(all_sorted_tasks) > 0:
             # TODO: Deal with