Lost Wages Calculator
Estimate lost wages due to injury, illness, or unemployment. Enter your pay rate, hours missed, and employment type to calculate gross lost wages and approximate net lost income after taxes.
How to use this tool
- Enter hourly wage, hours worked per week, weeks of work missed, federal income tax rate and state income tax rate in the fields above.
- Results update instantly as you type — or click Calculate.
- Read your gross lost wages and the full breakdown beneath it.
⚠ This tool provides general estimates for education only and is not financial, tax or legal advice. Figures may not reflect your situation — verify with a qualified professional.
Formula
Gross Lost Wages = Hourly Rate × Hours/Week × Weeks Missed
Net Lost Wages = Gross Lost Wages × (1 − Federal Tax Rate − State Tax Rate)
Daily Wage Loss = Hourly Rate × (Hours per Week ÷ 5)
How it works
Gross lost wages represent the total pre-tax income an individual would have earned during the missed work period, computed directly from the hourly rate, standard weekly hours, and number of weeks absent.
Net lost wages deduct estimated federal and state income tax liability using the marginal rates provided, giving a realistic picture of after-tax take-home income lost. This figure is often the basis for personal injury or workers' compensation claims.
Worked example
$25/hr worker misses 4 weeks (40 hrs/week), 22% federal + 5% state tax
- Weekly pay = $25 × 40 = $1,000
- Gross lost wages = $1,000 × 4 weeks = $4,000
- Combined tax rate = 22% + 5% = 27%; taxes on lost wages = $4,000 × 0.27 = $1,080
- Net lost wages = $4,000 − $1,080 = $2,920
- Daily loss = $25 × (40 ÷ 5) = $25 × 8 = $200/day
Gross lost wages are $4,000.00 and net lost wages after taxes are $2,920.00.
Common mistakes to avoid
- Using net (after-tax) pay as the hourly rate rather than gross pay — the formula applies tax rates to gross lost wages; inputting net pay and then subtracting taxes again double-counts the deduction.
- Forgetting to include overtime, bonuses, or commissions that would have been earned during the missed period, which are compensable components of lost wage claims.
- Applying a single federal tax rate to the entire lost-wage amount without checking whether the income falls across multiple marginal brackets, which can understate or overstate net loss.
Key terms
- Gross Lost Wages
- The total pre-tax earnings an employee would have received during the period they were unable to work.
- Net Lost Wages
- Gross lost wages minus estimated income taxes; the actual after-tax income the worker did not receive.
- Marginal Tax Rate
- The rate applied to each additional dollar of income; used here to approximate the tax burden on lost wages.
- Workers' Compensation
- A state-mandated insurance program that may replace a portion of lost wages when an employee is injured on the job.
Frequently asked questions
- Is lost wage compensation taxable income?
- Generally yes. Compensation for lost wages is treated as a substitute for wages and is subject to income tax and payroll taxes, whether received from an employer, disability insurer, or legal settlement.
- How do I calculate lost wages if I am self-employed?
- Use your net self-employment income divided by working days to find a daily rate, then multiply by days missed. Document income with tax returns, invoices, and contracts, as self-employed claims require more proof than W-2 employees.
- Does this calculator account for future lost earnings capacity?
- No. This calculator estimates wages lost for a specific period already missed. Future lost earning capacity in personal-injury claims requires a forensic economist's analysis including discount rates and career trajectory projections.