diff --git a/tests/validation/NEON/InstanceNormalizationLayer.cpp b/tests/validation/NEON/InstanceNormalizationLayer.cpp
index 9d13a2b..1073a7f 100644
--- a/tests/validation/NEON/InstanceNormalizationLayer.cpp
+++ b/tests/validation/NEON/InstanceNormalizationLayer.cpp
@@ -1,5 +1,5 @@
 /*
- * Copyright (c) 2019 Arm Limited.
+ * Copyright (c) 2019-2020 Arm Limited.
  *
  * SPDX-License-Identifier: MIT
  *
@@ -45,7 +45,11 @@
 /** Tolerance for float operations */
 AbsoluteTolerance<float> tolerance_f32(0.0015f);
 #ifdef __ARM_FEATURE_FP16_VECTOR_ARITHMETIC
-AbsoluteTolerance<float> tolerance_f16(0.5f);
+// This precision is chosen based on the precision float16_t can provide
+// for the decimal numbers between 16 and 32 and decided based on multiple
+// times of execution of tests. Although, with randomly generated numbers
+// there is no gaurantee that this tolerance will be always large enough.
+AbsoluteTolerance<half> tolerance_f16(static_cast<half>(0.015625f));
 #endif // __ARM_FEATURE_FP16_VECTOR_ARITHMETIC
 } // namespace