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How Workers Comp Benefits Are Calculated

Workers compensation benefits follow a formula, not a judgment call. Knowing how the math works lets you check whether what you are being offered lines up with what your state's law actually requires.

Priya Raman
By Priya Raman, Contributing Writer, Policy & Regulation
Updated July 2, 2026

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The formulas below are the common pattern, not a ruling on what your state actually pays. Nothing here is legal advice. Workers compensation laws vary significantly by state, and your specific situation may involve details that affect your benefits. Consult a licensed workers compensation attorney if you have questions about your claim.

Most states pay TTD benefits at two-thirds (66.67%) of your average weekly wage, up to a state maximum. A worker earning $900 per week with an $800 state cap receives $800, not $600. The formula looks simple. The AWW calculation, benefit caps, and offset rules are where it gets complicated.

Average weekly wage: the foundation of every benefit

Your AWW is typically the average of your earnings in the 52 weeks before the injury, though some states use 13 weeks. Overtime, tips, and concurrent job income may or may not count, depending on your state. If your earnings varied, the calculation method matters more than it sounds. An understated AWW reduces every benefit calculated from it.

Temporary total disability (TTD)

TTD pays when you are completely unable to work. Most states pay 66.67% of AWW, up to the state cap, with some also setting a minimum floor. Benefits continue until you return to work, reach maximum medical improvement (MMI), or exhaust the state's maximum weeks. The waiting period is typically three to seven days. Many states require the insurer to pay retroactively to day one if your disability runs longer than seven to fourteen days.

Temporary partial disability (TPD)

TPD applies when you return to modified or light-duty work at reduced earnings. Most states pay a percentage of the wage difference. Earning $800 per week before the injury and $500 per week on light duty means TPD covers a percentage of that $300 gap.

Permanent partial disability (PPD)

PPD applies when your injury is permanent but does not prevent all work. The formula: impairment rating times scheduled weeks (from the state injury schedule) times the weekly benefit rate. A 15% rating on an arm scheduled for 200 weeks at $600 per week yields $18,000. See what is an impairment rating for how the percentage is determined.

Permanent total disability (PTD)

PTD pays when an injury permanently prevents all work. Benefits are typically a percentage of AWW, paid for life or a long defined period, subject to state maximums. PTD is reserved for the most severe injuries: loss of two limbs, paralysis, or blindness. Relatively few claims reach it.

Use the calculator for an estimate

The Workers Comp Settlement Calculator takes your injury type, AWW, and impairment rating to produce a PPD settlement estimate. Use it as a planning reference, not a legal determination of what you are owed.

Run the formula yourself

Plug in your wage and rating to see the settlement math from this guide in action.

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Keep reading on the formula

Good to know

What people ask about the math

What percentage of my salary do I get on workers comp?

Most states pay temporary total disability at 66.67% of your average weekly wage, subject to a state maximum. A few states use different percentages (60%, 70%, or 80%). The state maximum caps benefits even if 66.67% of your wage exceeds it. Check your state's workers comp schedule for the current maximum.

How long does it take to get workers comp benefits?

After your claim is accepted, most states require the insurer to begin payment within 14-21 days. There is also a waiting period (typically 3-7 days) before benefits begin. If the insurer disputes the claim, payment may be delayed until a hearing or settlement. Prompt reporting of your injury to your employer matters.

What is the maximum workers comp benefit?

Each state sets its own maximum weekly benefit. It is typically tied to the state's average weekly wage, often 100-200% of the state AWW. For 2025, state maximums range from under $700/week in some states to over $2,000/week in others. Check your state's workers comp authority for the current maximum.

Can you get workers comp and Social Security disability at the same time?

Yes, but there is an offset. If you receive both workers comp and SSDI, your combined benefits generally cannot exceed 80% of your average current earnings before your disability. The offset reduces one or both benefits to stay within that limit. This is a complicated area. Consult an attorney if it applies to you.