How to Claim Lost Wages After an Accident (Complete Guide)

Lost wages are a significant component of most personal injury settlements. If your injuries prevented you from working, you are entitled to compensation for the income you lost during your recovery. This guide explains how to calculate lost wages, what documentation you need, and how to maximize this component of your claim.

What Qualifies as Lost Wages?

Lost wages include all income you would have earned but for the accident. This includes regular salary or hourly wages, overtime pay you would have earned, bonuses and commissions, tips and gratuities, vacation and sick days used for recovery, self-employment income, and any other employment-related income.

How to Calculate Lost Wages

For hourly employees, multiply your hourly rate by the number of hours you missed. Include any overtime you would have worked based on your typical schedule. For salaried employees, divide your annual salary by 365 to get your daily rate, then multiply by the number of days missed.

For self-employed individuals, calculating lost wages is more complex. Use your tax returns from the previous two to three years to establish your average income. Compare your income during the recovery period to your historical average. Document any contracts, clients, or business opportunities lost due to your injuries.

Documentation Required

To support your lost wages claim, you need a letter from your employer confirming your rate of pay, work schedule, and dates missed. Pay stubs from before and after the accident. Tax returns, particularly for self-employed individuals. A doctor's note confirming you were unable to work and the dates of your work restriction. Documentation of any reduced hours or light-duty work.

Lost Earning Capacity

If your injuries permanently affect your ability to work, you can claim lost earning capacity in addition to lost wages. Lost earning capacity compensates you for future income you will never earn because of your injuries. This is calculated by a vocational rehabilitation expert or economist who considers your age, education, work experience, pre-injury earning trajectory, and the extent of your permanent limitations.

Conclusion

Lost wages are a critical component of your settlement that should not be overlooked. Document your lost income thoroughly and consider future earning capacity if your injuries are permanent.

Use our free settlement calculator to estimate the total value of your claim including lost wages.