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How to Determine Lost Wages

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When you’re injured due to someone else’s negligence, you might (correctly) assume that you’re entitled to receive compensation for your medical bills – but these aren’t the only damages available to you. If your injury prevents you from working, you can pursue compensation for your lost income as well. Your attorney will explain how to determine lost wages so that you have a good idea of what to expect in a fair settlement offer, but you can use the information below to quickly estimate your potential damages. It all comes down to proper documentation.

How to Determine Lost Wages

To start, you will need to collect documents that support your claim that your injuries have prevented you from returning to work. The following are the most basic of these documents, and they’re needed in every case:

  1. Tax returns (generally three years prior and all years since the accident)
  2. Paycheck stubs or paycheck forms
  3. In the case of a trucking owner-operator, settlement sheets for three years prior and every pay period since the accident
  4. In the case of a business owner, business records or documents/letters from a CPA (such as an income statement, balance sheet, and/or an opinion letter from your accountant)
  5. Other documents may be needed depending on the unique circumstances of your employment or business

To document your need to remain off work, ask your doctor for a statement that details how much time you need to take off from your job to recover from your injuries. You need medical support for justifying the time you missed from work. An attorney can help secure this information from doctors through reports or depositions.

Additionally, ask your employer for copies of your recent checks or pay stubs that show the wages that you earned before you were injured. Finally, ask your employer to write a letter to confirm the information about your employment. All of the documents listed above may be important and should be secured as early in the process as possible.

How to Calculate Your Lost Wages

The calculation that you will use to figure your lost wages will depend on whether you were paid by the hour, by salary, or by some other basis. If you receive an hourly wage, you will take that rate and multiply it by the total number of hours that you missed from your job because of your injuries. For example, if you earn $25 per hour, work 8 hours a day, and missed 21 days of work, you would calculate your lost wages as follows:

25 x (8 x 21) = $4,200 in lost wages

If you are paid on a salary basis, the basic calculation is to divide your annual salary by 2,080. This is the number of working hours that there are in a year. You will then take this number and multiply it by the hours that you missed work because of your injuries. For example, if you earn an annual salary of $60,000 and are forced to miss 21 days of work, you would calculate your lost wages as follows:

$60,000/2,080 = 28.85

28.85 x (8 x 21) = $4,864.80 in lost wages

Other types of income might also be recoverable, such as regular overtime, lost commissions, lost bonuses, or lost economic opportunity. Your attorney can explain the types of income losses for which you might be eligible.

Income Losses for Self-Employed People

If you are self-employed, you can still claim your income losses. Your income consists of the earnings and profits that you would have made if it hadn’t been for your injury. You will need to gather records and documents to prove the earnings that you would have expected from the time of your accident until the date of your judgment or settlement. Examples of some of these documents include 1099 forms, invoices, bookkeeping and accounting records, receipts, and correspondence.

Considering Other Income Losses

In addition to your past income and wage losses, you may be entitled to claim future losses of income and your lost earning capacity. To establish your future income losses, your lawyer may work with a forensic economist to establish what your future losses will likely be. In addition, your attorney may hire a vocational expert to establish your lost opportunities in the open labor market. A variety of factors are considered when determining your future losses of income, including your age, employment history, disability, skills, and level of education.


Although you might initially think that it will be simple to determine your lost wages, it’s a complicated process in many cases. You will need to work with an experienced personal injury attorney who understands the factors that are important when calculating lost income and wages. Working with a lawyer will increase the likelihood that you will recover all of the compensation to which you are entitled.

To learn more about your potential negligence claim and how damages are calculated, contact the Law Offices of Bryan Musgrave to schedule a consultation by calling 417-322-2222. You can also request a free case review by filling out our online request form.

Files under: Personal Injury