How is Loss of Income Calculated? - Sand Law North Dakota
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How is Loss of Income Calculated?

3rd March 2024

Stressed woman trying to calculate lost income surrounded by papers and a calculator

Understand your options as we break down different methods for calculating lost income for personal injury claims.


  • Lost income, a key part of personal injury claims, refers to money you couldn’t earn due to an injury. This includes both wages from your recovery period and potential future income loss.
  • Calculating lost income depends on your employment situation. It’s straightforward for hourly workers and salaried workers, but self-employed individuals require more documentation to prove pre-injury income.
  • Strong evidence is crucial for lost income claims. This includes pay stubs, tax returns, medical records showing injury severity and work restrictions, and any out-of-pocket expenses.
  •  If you’ve been injured due to someone else’s negligence, consider consulting with a personal injury lawyer to discuss your specific case and how to calculate lost income.

If you’re injured in an accident caused by someone else’s negligence, you may be able to recover compensation for your damages in a personal injury lawsuit. Lost wages are one category of damages, awarded when your injuries prevent you from working or fully completing your job responsibilities.

Calculating lost income is usually pretty straightforward, but there may be complicating factors.

If you or a loved one has been injured due to another party’s negligence, you deserve to be compensated for your suffering. The reputable personal injury lawyers at Sand Law are your allies in this fight–schedule a free consultation by calling (701) 394-3715 or contacting us online.

What is Lost Income?

Lost income refers to the wages or earnings you are unable to earn because of your injuries. This includes money you would have made during your recovery period when you couldn’t work. Additionally, lost income accounts for any projected future income loss due to the long-term effects of your injury.

Lost income is a crucial component of your personal injury claim, and it’s essential to understand how it’s calculated.

Types of Lost Income

Loss of income in a personal injury lawsuit is generally divided into two categories: lost wages and lost future earning capacity.

  • Lost wages represent the income you were unable to earn because of your injury during the recovery period. It can also include commissions, bonuses, and tips that you would have normally earned.
  • Lost future earning capacity refers to the projected loss of income due to your injury’s permanent impact on your ability to work. Catastrophic injury survivors often seek this type of compensation. However, lost future earning capacity can be trickier to calculate and often involves an expert witness, such as an economist. They will consider factors like your pre-injury work history and earning potential, the severity and permanence of your injuries, and your age and life expectancy.

Here are some additional things to keep in mind:

  • Documentation is key. The more documentation you have to support your lost income claim, the stronger your case will be. This includes pay stubs, tax returns, and any documentation of your injuries and recovery process.
  • Paid time off. If you used paid time off, such as sick leave or vacation days, to recover from your injuries, you can still claim lost wages.
  • Self-employed individuals need to provide proof of their regular income, such as tax returns and bank statements, to calculate lost wages.

If you’ve been injured due to someone else’s negligence and are considering a personal injury lawsuit, it’s important to consult with a personal injury attorney to discuss your specific case and how to calculate your lost income. They can help you gather the necessary documentation and determine the fair compensation you deserve.

Calculating Lost Income After a Personal Injury Accident

A devastating personal injury accident, such as a truck accident, can interfere with your ability to work, costing you income. The general approach to calculating lost income involves considering your pre-injury earnings and the time you missed work due to your injury. However, the specific method used depends on your employment situation.

Loss of Hourly Wages

If you are an hourly employee, calculating lost wages is relatively straightforward. You simply multiply your hourly wage by the number of work hours you missed due to your injury.

For example, imagine you earn $20 per hour and miss two weeks (10 workdays) because of your injuries. Your lost wages would be:

  • Lost Wages = $20/hour x 80 hours (10 days x 8 hours/day) = $1,600

Loss of Salary

For salaried employees, calculating lost wages requires a slightly different approach. Here’s how it works:

  • Daily Rate: Divide your annual salary by the number of workweeks in a year (typically 52) to determine your weekly rate, and divide it by 5 again to determine your daily rate.
  • Missed Workdays: Multiply your daily rate by the number of workdays you missed due to your injury.

Let’s say your annual salary is $50,000.  Here’s how to calculate your lost wages if you miss 10 workdays:

  • Daily Rate = $50,000 / 52 weeks = $961.54 per week
  • Weekly rate = $961.54 / 5 days = $192.31 per day
  • Lost Wages = $192.31 per day x 10 days = $1,923.10

Loss of Self-Employment Income

Calculating lost income for self-employed individuals can be more challenging, since you don’t receive regular paychecks. Establishing your pre-injury income requires gathering other documentation, and may require the help of an experienced attorney.

How to Provide Evidence of Lost Wages

Whether you were injured in a car accident, slip-and-fall, medical malpractice incident, or other personal injury accident, it is important to collect evidence of your damages to recover compensation. Building a strong claim for your lost income depends on documenting your pre-injury earnings and missed workdays.

  • Employee: Your pay stubs showcase your hourly wage or salary, pre-injury income, and missed pay periods due to injury. If unavailable, W-2 forms from previous years work too.  Request a verification letter from your employer detailing your wages, work schedule, and missed work dates.
  • Self-employed: Tax returns are a great way to demonstrate pre-injury income. Business records like invoices, contracts, and receipts can also demonstrate your pre-injury earnings and lost business opportunities. Bank statements revealing a decrease in income during recovery can also solidify your claim.

Remember, keeping a well-organized file with all these documents, medical records, receipts, and insurance communication is crucial. Medical records outlining the injury’s severity and work restrictions strengthen your claim.

Track out-of-pocket expenses, as they might be compensable depending on your case. The more documentation you have, the stronger your lost income claim becomes.

Other Types of Compensation for Personal Injury Accidents

Personal injury accidents can cause severe disruptions to your physical, emotional, and financial health. In addition to lost wages, North Dakota law allows you to seek compensation for various types of personal injury damages, including:

  • Medical expenses: This covers all past and future medical bills related to your injury, including doctor visits, hospital stays, medications, and rehabilitation.
  • Pain and suffering: Compensation for the physical and emotional pain you’ve endured due to the accident.
  • Property damage: Reimbursement for any property damage resulting from the accident, such as car repairs.

Consult with an experienced North Dakota personal injury lawyer for information about the damages you may be able to pursue in your claim.

Call Sand Law for Assistance Calculating Lost Income For Your Personal Injury Lawsuit

If you’ve been injured in an accident caused by someone else’s negligence, you may unfairly face physical limitations, emotional suffering, and financial burdens. Sand Law can help. Our experienced personal injury attorneys understand the complexities of calculating lost income and can assist you with the following.

  • Calculating lost income: We can analyze your situation and determine the most accurate method to calculate your lost wages or lost future earning capacity.
  • Gathering evidence: We will help you gather and organize all the necessary documentation to support your lost income claim.
  • Fighting for maximum compensation: Our team will work tirelessly to negotiate with the insurance company if they avoid paying you fairly and fight for the maximum compensation you deserve for all your losses, including lost income. Remember, North Dakota is a comparative negligence state, so it is essential to have a seasoned attorney to establish the defendant’s liability.

Don’t let lost income add to the burden of your injury. Contact Sand Law today to discuss your case and learn how we can help you recover the compensation you deserve. Schedule a free consultation by contacting us online or calling (701) 394-3715.

Frequently Asked Questions

What if I was only partially unable to work due to my injury?

If your injury has only partially affected your ability to work, you can still claim lost income for the portion of your wages you couldn’t earn. This could include reduced hours due to your injury or having to take a lower-paying position or job because of your new limitations.

I used paid time off (PTO) while recovering. Can I still claim lost income?

Yes. You can still claim lost income for the time you missed work, even if you used PTO. Paid time off is a form of compensation, and the accident forced you to use PTO you otherwise would not have spent.

What happens if I don’t have pay stubs or other documentation of my income?

If you don’t have pay stubs or W-2s, don’t worry.  A personal injury attorney can still establish your income through other methods. This might include bank statements showing income deposits or tax returns from previous years.