How Are Lost Wages Calculated in Personal Injury Claims?

Beyond bodily harm, personal injury victims are often confronted with mounting medical bills and lost income because their injuries prevent them from working. These unfortunate circumstances can quickly become a vicious cycle where keeping up with medical bills becomes virtually impossible.

Luckily, disrupted wages can often be recovered, but understanding how lost income is calculated is the first step in breaking the cycle. Let’s explore how lost income is calculated in personal injury claims.

What Constitutes Lost Income in Personal Injury Cases

“Lost income” is an umbrella phrase used to describe the following personal injury damages:

• Lost Wages: The actual income you lost because you had to take time off work to recover from your injuries.
• Lost Benefits: Any job-related benefits you lose because you cannot work. These include paid vacation time, sick days, or performance bonuses.
• Diminished Earning Capacity: The future earning potential you may lose because injuries prevent you from returning to the job you held before the personal injury.

Factors Affecting Lost Wages Calculation

The primary factors affecting the wage loss calculation include:

• Days missed, whether missed for general recovery, medical appointments, surgeries, or partial days when you had to leave early or late for treatment. 
• Employment type: While relatively straightforward for hourly and salaried employees, calculating lost wages becomes more complex with commission-based workers, gig workers, and self-employed personal injury claims due to income fluctuations.
• Future earning potential: Over the course of your career, you may have the opportunity to advance your career, receive raises and promotions, and earn income that keeps pace with inflation. However, personal injuries may keep you from enjoying these benefits.

What You May Need to File a Lost Wages Claim

To file a lost wages claim, you must prove financial loss, either through payroll records, pay stubs, tax returns, bank statements, or a letter from an employer that details:

• How long you were unable to work
• How the personal injury impacted your pay
• Any projects that were disrupted because you couldn’t work
• A history of bonuses or promotions
• Vacation and sick time lost due to the personal injury

Calculating Lost Wages in Personal Injury Cases

As previously mentioned, the method used to calculate lost wages in personal injury claims varies with the type of job.

For Hourly Employees

If you are paid by the hour, simply multiply the hours missed by the hourly wage. If appropriate, you can factor in overtime, seasonal variations, or pay bumps for working different shifts.

For Salaried Employees

If you receive a set annual wage, simply divide your annual salary by 52 to get a weekly rate. Then, divide by five to determine your daily rate. Next, multiply your day rate by the days missed.

For Gig Workers

Calculating the fluctuating income of gig workers requires averaging daily earnings from the past year. Additionally, you may be required to show documented proof of jobs lost because of the personal injury, proof of booking patterns, and evidence of seasonal fluctuations.

For Self-Employed Workers

Self-employed workers will likely have to show tax returns, profit and loss statements, and documented proof of jobs lost due to the personal injury.

How a Lost Wages Attorney Can Assist

While calculating lost income in personal injury claims may seem relatively straightforward, a lost wages lawyer will:

Ensure Accurate Calculations

Similar to accountants who understand the law and know how to maximize deductions and tax liability, our attorneys know exactly what type of compensation can be included in your claim.

Our personal injury claim lawyers consider complex factors like missed bonuses, paid time off, and lost earning capacity. We account for complex income structures and compile evidence that insurance companies and juries understand and take seriously.

Hold Insurance Companies Accountable

While many insurance companies act with integrity, others may try to downplay your injuries or pressure you into accepting an unfair settlement amount. Let our attorneys take over the negotiation process for you. Our lost wages lawyers push back against unfair tactics and help you fight for every dollar you deserve.

Handle Complex Cases

Personal injury claims involving lost wages vary in complexity—especially for those who are self-employed or experience income fluctuations. Our personal injury claim lawyers have decades of experience handling these complex scenarios and will not only prove your current losses; we’ll also project future lost earnings, ensuring you receive the compensation you deserve.

When Your Paycheck Takes a Hit, We Hit Back

Have you been injured due to someone else's negligent behavior and are struggling to keep up with mounting medical bills? Whether you need us to push back against insufficient settlements from insurance providers or advocate for lost wages in court, our lost wages lawyers are here to assist. With over 30 years of personal injury experience, we know what it takes to maximize your personal injury settlement. Contact us today !