How Loss of Earnings Amounts Are Calculated

If you have been injured in an accident that was not your fault, you may be entitled to compensation for your loss of earnings. This is a tricky area of personal injury law, as many factors must be considered when calculating how much money you can claim. Factors that can determine the outcome of your claim include the severity of your injuries and your age.

Types of Loss of Earnings

There are two main types of loss of earnings you can claim in a personal injury case:

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  • Past loss of earnings
  • Future loss of earning

Past Loss of Earnings

Past loss of earnings is the money you have lost since the accident occurred up until the present day. This can include time off work, reduced hours, or even a lower-paid job.

Future Loss of Earnings

Future loss of earnings is more challenging to calculate as it takes into account the fact that your injuries may have an impact on your ability to work in the future.

This could include not being able to return to your previous job or taking a lower-paid job in the future. In this case, it is always advisable to speak to a personal injury solicitor who can give you an accurate estimate of the amount of compensation you could receive.

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Factors That Affect the Calculation of Loss of Earnings

When calculating the loss of profits, several factors need to be considered.

The Severity of Your Injuries

The severity of your injuries will impact how much money you can claim for loss of earnings. For example, if you have suffered life-changing injuries, you will likely be entitled to more compensation than if you only suffered minor scrapes and bruises.

If your injuries are serious, then it is more likely that you will be unable to return to work or will have to take a lower-paid job in the future hence more compensation.

The Type of Work You Do

The type of work you do will also affect how much money you can claim. If you are a highly-skilled worker, for example, you may be able to claim more than someone who does manual labor.

Your Current Age

Your age is also a factor that needs to be considered when calculating loss of earnings. If you are younger, you are likely to have many more working years ahead of you, so you may be able to claim more for future loss of earnings.

How to Calculate the Loss of Earnings

Loss of earnings capacity assessments is calculated by multiplying the employee’s annual times the number of years between the injury date and the final verdict. The rules are different from one state to another, and the employees’ net salary.

Some courts may not award medical or future medical expenses, with few exceptions. In addition, the total dollar amount usually cannot exceed 20% of the personal injury award for pain and suffering and 65% for loss of earnings. The denominator, or salary, is the original net weekly pay before wages are cut off.

In many cases, there must be proof that the employee was paid regularly. Also, if you were regularly paid overtime, share the details with your lawyer. Other work benefits may be taken into consideration as well.

The current salary is often used as the starting point for calculating future medical expenses. A few states allow gross medical expenses to be used as the denominator in calculating future medical expenses, with no limitation on the dollar amount.

Lost wages can be measured either by averaging or simply considering 12 months. Some courts use a simple calculation where no averaging is allowed.

Final Thoughts

Once all of these factors have been considered, your solicitor can estimate the amount of compensation you could be entitled to. They may also ask for other information, such as medical records and details of any treatment you have received.

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