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How To Calculate Lost Wages in a Car Accident Claim

If you have been injured and missed work due to a car accident, you may be able to recover a significant amount of money in lost wages. In a car accident claim, lost wages compensate you for the money you would have earned had you not suffered a car accident injury. Read on to find out how to get an estimate of your lost wages.

Before Calculating Lost Wages

Before calculating your lost wages damages for a personal injury claim, you'll need to gather supporting documents that prove your medical condition prevents you from working. You should get a doctor's note or disability slip telling you how much time to take off from work in order to recover.

You should also get a copy of your recent pay stubs or checks to show your wages. You may be required to submit your most recent tax return or W-2, depending on your employment status. Finally, get a letter from your employer confirming your employment information.

Calculating the Amount of Lost Wages

Your lost wages calculations will differ depending on whether you are paid an hourly wage or an annual salary.

If You Are Paid an Hourly Wage:

Take the amount of your hourly wage and multiply it by the number of hours you missed due to the accident. For example, if your hourly wage is $20, and you missed work for three days (8 hours per day), your calculation would be: $20 x (8 hours x 3 days) = $480 (your total lost wages).

If You Are Paid an Annual Salary:

Take your yearly salary and divide it by 2080 (the number of weekday work hours in a year), then multiply by the number of hours you missed due to your injuries. For example, if your yearly salary is $40,000, and you missed 3 days of work, your calculation would be: ($40,000 / 2080) x (8 hours x 3 days) = $461.54 (your total lost wages).

Additionally, if there are any overtime payments you regularly make but missed, lost promotion opportunities, lost wage increases, lost sales commissions, or lost bonus payments, you may be able to recover these amounts as well. However, depending on the jurisdiction, certain states will only allow you to recover the net income.

Lost Income for the Self-Employed

If you're a freelancer, an independent contractor, or a sole proprietor, you are considered self-employed. In this case, you may claim lost income instead of lost wages, which refers to the amount of earnings and profits you would have made if you weren't injured.

You may still need to submit documents to show the specific amount of earnings you would have received from the time of the accident to the date of settlement or judgment. You may also be able to submit a 1099 form, correspondence, invoices, profit and loss statements, bank statements, or receipts to show lost income.

Considering Other Losses of Income

You may also claim future income losses, lost earning capacity, and lost compensation. Typically, a personal injury attorney will hire a forensic economist or other expert witnesses to lay out the foundation for your future earnings losses if your case goes to trial. Factors like your age, physical disability, employment history, skills, and education are considered in determining the amount of your future losses.

To calculate the total amount of damages for your car accident case, work through the Damages Estimate Worksheet and make sure you don't overlook any other losses you've suffered.


Below, we have answered a few common questions you might have regarding lost wages and car accident claims. Bear in mind that the answers to specific questions you have will depend on your individual circumstances.

Q: What does 'at-fault' mean in the context of a car accident?

"At-fault" refers to the party responsible for causing the car accident. The at-fault driver's insurance company typically pays for damages, including medical expenses and lost wages, incurred by the victim.

Q: How does the insurance company calculate lost wages?

The insurance company calculates lost wages based on your earning potential and the amount of time you've missed from work due to the accident. They require evidence such as pay stubs, medical records, and a letter from your employer.

Q: What role do medical records play in a car accident claim?

Medical records provide evidence of:

  • Your injuries
  • The medical treatment you received
  • The duration of your recovery

They are used to justify your claim for reimbursement of medical bills and lost wages.

Q: How does an insurance adjuster evaluate a claim?

An adjuster representing the insurance company evaluates a claim by reviewing medical records, bills, and any property damage. They also consider your lost wages and other out-of-pocket expenses related to the accident.

Q: Can I claim lost wages if I used sick days or vacation days (PTO) for recovery?

Yes, you can claim lost wages even if you used your sick days or vacation days to recover from the accident because these are benefits you would have had available if not for the accident.

Q: What should I do if the at-fault driver's insurance company contacts me?

Do not provide a recorded statement or sign any documents without consulting a lawyer. Make sure you know your rights and options before discussing the accident with the at-fault driver's insurance company.

Q: Can I claim future lost earning potential in my personal injury case?

Yes, you can claim future lost earning potential if your ability to earn in the future is affected due to the injuries sustained in the auto accident. A forensic economist or other expert witness may be needed to calculate these potential losses.

Q: How are medical expenses related to lost wages in a vehicle accident claim?

Medical expenses are related to lost wages because the time you spend in medical treatment, rehabilitation, or recovery can prevent you from working, leading to lost wages.

Q: What should accident victims do to recover lost wages?

Accident victims should keep all medical records and bills, document hours of work missed, and consult with a personal injury lawyer to ensure they get a fair settlement. They should also inform their insurance company about the accident promptly.

Q: How does the insurance policy affect my claim for lost wages?

The insurance policy you hold, as well as the policy of the at-fault driver, can greatly impact your claim for lost wages after an accident. Here are some key elements to consider:

  • Policy Limits: Each insurance policy has a limit on how much the insurance company will pay for a single accident. If your lost wages exceed this limit, you may not be fully reimbursed. This is especially relevant if the at-fault driver's policy has low limits.
  • Types of Coverage: The specific coverage you have on your policy can affect your claim. For example, Personal Injury Protection (PIP) or Medical Payments (MedPay) coverage can help cover lost wages regardless of who was at fault. However, these are optional coverages and are not available in all states.
  • Fault vs. No-Fault States: In no-fault states, your insurance company pays for your lost wages (up to your policy limits), regardless of who caused the accident. In contrast, in at-fault states, the at-fault driver's insurance would typically cover your lost wages.
  • Uninsured/Underinsured Motorist Coverage: If the at-fault driver does not have insurance or doesn't have enough insurance to cover your lost wages, and you carry uninsured/underinsured motorist coverage, this part of your policy could kick in to cover the difference.
  • Deductibles: Depending on your policy, you might have to pay a deductible before your insurance covers your lost wages. This deductible amount would be subtracted from the total amount you'd receive.
  • Time Limits: Insurance policies often set time limits for filing claims. If you fail to file your claim within the specified time, you may lose your right to claim your lost wages.

Because the details of your insurance policy can be difficult to understand, consult with a personal injury attorney. They can help guide you through the claims process to make sure you receive the maximum compensation you're entitled to.

Have You Lost Wages Due to a Car Accident? Get Help From a Car Accident Lawyer Today

Determining lost wages damages may seem simple at first, but it usually involves more than just adding up numbers. It's easy to overlook other factors that can be added to your lost wages claim.

An experienced car accident attorney will be able to guide you through the process and ensure that you're fairly compensated. Speak with a personal injury lawyer to get legal advice during a free case evaluation today.

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