Lost Wages 101: How Income Is Calculated in a Personal Injury Claim

Missing work after a car accident can put real financial stress on your life, especially when medical bills and repair costs start adding up. That’s why understanding how lost wages are calculated after a car accident is so important. Lost wages are a major part of most personal injury claims, and knowing what you’re entitled to—and how to prove it—can make a big difference in the outcome of your case.
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Before you get started with any type of lost wages calculator, it helps to know what lost wages actually include and how insurance companies, attorneys, and courts determine the total amount owed.

What Are Lost Wages?

“Lost wages” simply refers to the income you missed out on because your injuries kept you from working. This can include your regular pay, overtime, bonuses, tips, commission, and even the sick days or PTO you had to use during your recovery. In other words, it’s any money you would have earned if the accident had never happened.

​If you’re self-employed, lost wages still apply—you’ll just need more documentation to show what your earnings normally look like. This is where collecting evidence for personal injury claims becomes vital.

How Are Lost Wages Calculated?

The method used to calculate lost wages depends on how you’re paid and how long you’ve been unable to work. For most people, the calculation starts with your regular daily or hourly pay rate multiplied by the number of days or hours you missed. For example, if you earn $200 a day and you couldn’t work for ten days, your lost wages would be $2,000. If you’re paid hourly, the formula is the same.​

Things get a little more complicated if you typically earn fluctuating income, like a hairstylist who relies on tips or a salesperson who depends on commissions. In those cases, insurance companies look at past earnings to estimate an average. That average becomes the basis for determining how lost wages are calculated in a lawsuit or settlement discussion.

How to Calculate Future Lost Wages

In some cases, your injuries may continue to affect your ability to work long after the accident. This is where how to calculate future lost wages becomes important. Future losses are usually estimated based on your current income, how long your doctor expects your recovery to take, whether you can return to your regular job, and whether your injuries reduce your long-term earning capacity.
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For example, if a delivery driver develops a permanent back injury and can’t return to their physically demanding job, their attorney may work with medical and economic experts to estimate how much income they’ll lose over the coming years. This type of calculation can dramatically increase the value of a claim, and it goes beyond what a basic lost wages calculator can provide.

Do I File a Personal Injury Claim or Workers’ Comp?

Most people confuse workers’ compensation rules with personal injury claims, but they’re very different when it comes to lost wages. Workers’ comp applies only if you were injured on the job, and it typically only pays a portion of your lost income. There’s also no compensation for pain and suffering under workers’ comp, and you don’t need to prove fault.

A personal injury claim, on the other hand, allows you to recover the full amount of your lost wages—past and future—along with additional damages like medical bills and pain and suffering, as long as someone else caused the accident. Understanding the difference between workers compensation vs. personal injury claims is key to determining how much compensation you can actually pursue.

Need an Injury Lawyer in North Hollywood or Reseda?

If you need to consult with a North Hollywood workers’ compensation lawyer or a Reseda personal injury attorney, contact Yepremyan Law to schedule your free consultation. Since 1998, our law firm in North Hollywood has helped thousands of clients recover millions of dollars. We can help you understand your rights and explore all available sources of compensation.

Yepremyan Law works on a contingency basis for all personal injury matters—no recovery, no fee. 

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