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Everything You Need to Know About How to Calculate Lost Wages in a Car Accident Claim

06.05.2020 by Girl on Fire // Leave a Comment

The consequences of a car accident on victims can be devastating, especially for victims who have incurred serious injuries. They often extend far beyond the pain and suffering of the injury and can include extensive economic damages. Hospital stays, necessary surgeries, and recovery care can all cost a fortune, and that only touches the tip of the iceberg.

Car Accident

While workers are recovering from their injuries, they will also lose income, which can have a long-lasting impact on their finances. Thankfully, compensatory damages can cover wages lost due to personal injury. Read on to find out everything accident victims need to know about how to calculate lost wages following a car accident.

The Easiest Way to Determine Lost Wages

The easiest way for accident victims to determine lost wages is to consult a San Antonio Car Accident Attorney. They should expect to provide relevant documentation such as doctors’ notes or disability slips that indicate how much time victims must take off from work to ensure a full recovery, paystubs or checks that show their wages, tax returns from the previous year, and a copy of the accident report filed with the police.

Car Accident

Although it’s much easier to just consult an attorney for help with calculations, some accident victims may want to get a better idea of what to expect before they schedule their consultations. Calculations will vary depending on the type of wages the victim earned, so pay attention and choose the right strategy to get an accurate idea of what to expect.

Calculations for Hourly Wage Workers

Workers who receive hourly wages may experience significant financial hardship following a car accident. They can calculate how much to expect in terms of damages for lost wages by multiplying the number of hours of missed work by the amount of their hourly wages. Let’s take a look at one easy to understand example.

Say an hourly worker makes $10 per hour and works full-time. If he or she misses one week of work, that would amount to 40 hours of missed pay. Multiply $10 by 40 hours. The victim would be out $400 while he or she recovered from the accident.

Calculations for Salaried Employees

The calculations used to determine lost wages for salaried employees are a little more complicated. First, workers must take their yearly salaries and divide it by the number of weekday work hours in one year. This is usually 2080 hours. Multiply the result by the number of hours missed during recovery to get the total lost wages.

To take a look at another example, let’s say a salaried employee makes $40,000 per year and misses one week of work following an accident. He or she would divide $40,000 by 2080 to approximate an hourly wage of $19.23 per hour. Multiply this number times 40 hours, or one full work week to get $769.20 in lost wages.

Additional Damages for Hourly and Salaried Workers

The damages awarded for lost wages sometimes extend beyond just normal hourly wages, although every state has different regulations and some only allow victims to recover net income. In many cases, victims that regularly receive overtime payments and miss the overtime hours during their recovery periods may be able to recover additional damages. Workers can prove that they have lost opportunities for promotions, wage increases, sales commissions, or bonus payments may also be able to claim additional damages.

Calculations for Self-Employed Workers

Self-employed workers include freelancers, sole proprietors, and independent contractors. Basically, if a worker receives a 1099 instead of a W-2 during tax season, he or she is self-employed. A self-employed accident victim can still recover damages, but he or she must claim lost income instead of lost wages. Lost income refers to the earnings or profits the worker would have made during his or her recovery period.

Like hourly and salaried employees, self-employed workers must show documentation to prove their earnings. They can submit invoices, receipts, client correspondence, or 1099 forms as proof of lost income.

Other Sources of Lost Income from a Car Accident

Many personal injury victims don’t only lose out on wages or self-employment income. They may also struggle with lost earning capacity and future income losses.

Calculating future losses is much more difficult and typically requires the help of a forensic economist. This professional will take factors like the victim’s age, employment history, work-related skills, education, and level of physical disability into account, then use this information to determine an estimate of potential future income losses.

Wage Loss Insurance

Some car insurance plans cover lost wages. Most liability and uninsured motorist protection plans will cover 100% of an accident victim’s lost wages if he or she was determined not to be at fault for the accident, while personal injury protection plans typically cover 80% of lost wages, regardless of who was at fault. Read the fine print, though, because not all insurance plans cover wages lost due to missed work. When in doubt, ask an attorney to review the contract.

Other Damages

An attorney can also help clients determine what other damages they should claim. They usually include the cost of medical care, property repair or replacement, and compensation for pain and suffering. Lost wages can make it all but impossible to pay hospital bills, buy medication and rehabilitative supplies, and continue covering basic expenses while accident victims are recovering. It’s important that victims claim all relevant damages to minimize economic losses and ensure the best chances of making a full recovery.

The Bottom Line

Calculating lost wages from a car accident is easier for hourly and salaried employees than it is for workers who make most of their money from tips or commissions or through self-employment and independent contracting. The best solution for all accident victims concerned about their ability to pay for hospital bills or provide for their families during their recovery periods is to consult an attorney. Even those who need no help calculating lost wages will still benefit from consulting a local law firm and finding representation during negotiations or, if the case goes to court, at trial.

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Girl on Fire

Photographer at Loudmouth Photography
Brandy is the wife to a carpenter/musician and the mother of 3 amazingly awesome homeschool/unschooled girls. Brandy is a Photographer as well as a Coach for the Weebellion as part of Rolling Rebellion Jr. Roller Derby. Brandy is passionate about many things and suffers from a very painful and degenerative neurological disease called CRPS/RSD.
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