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When you're injured in an accident, lost income is often a major concern during recovery. For salaried employees, calculating lost wages is straightforward—multiply your hourly rate by the hours missed. But for the millions of self-employed workers across the country, determining fair compensation requires a different approach.
How Traditional Wage Loss Calculations Work
Here’s an example of wage loss calculation for a salaried employee
| John Doe- Wage Loss Calculations | |||
| Employer: | ABC123 Company | ||
| Occupation: | Laborer | ||
| Duties: | Shipping, Receiving | ||
| Weekly Hours: | 40 | ||
| Hourly Wage | $25.00 | ||
| Dates Missed | Hours Missed | Hourly Pay | Total Wage Loss |
| 1/1/2025 | 4.00 | $25.00 | $100.00 |
| 1/2/2025 | 5.00 | $25.00 | $125.00 |
| 1/3/2025 | 6.00 | $25.00 | $150.00 |
| 1/4/2025 | 7.00 | $25.00 | $175.00 |
| 1/5/2025 | 8.00 | $25.00 | $200.00 |
| Total: | 30.00 | $25.00 | $750.00 |
In the example above, we assume that John Doe works 8 hours per day and 5 days per week, earning $25.00 for each hour that he works. John has also missed a total of 30 hours for the dates of January 1, 2025 to January 5, 2025. If we multiply the hours John missed with his hourly rate, we get a total of $750 in wage loss.
(Keep in mind that even though John has incurred $750 in lost wages for the week, there may be limitations on what he can be compensated for).
Special Considerations for Self-Employed Workers
However, things can get a bit more complicated if you own your own business and consider yourself self-employed. Whether you're a rideshare driver, freelance consultant, contractor, or small business owner, your income likely fluctuates—making wage loss calculations more complex but no less important for your recovery.
In general, calculating your wage loss as a self-employed individual follows the same methods as any other employee. The difference is determining your hourly, monthly, or even yearly pay since it will likely vary. You’ll need to rely on averages from prior statements, such as monthly earnings, for the six months prior to your injury, or tax returns from two years prior.
Key documentation you'll need to support your wage loss claim includes:
- Recent tax returns (typically 2-3 years)
- Bank statements showing regular income deposits
- Client invoices and payment records
- 1099 forms or other income documentation
- Profit and loss statements for your business
- Any contracts showing expected future work
The hard part for self-employed workers is showing both the money you've already lost and the work you missed out on. Knowing what affects your settlement amount helps you track all your losses, including future income. If you had jobs scheduled or a busy season coming up when you got hurt, that lost income counts too. That's why you need an experienced personal injury attorney.
Insurance companies tend to look at self-employed wage loss claims more closely. They often question these claims and require lots of proof, since self-employed income can vary from month to month.
Getting the Compensation You Deserve
Reimbursement for time missed from work is one of the most important aspects for those who are injured. Don't let the complexity of self-employment calculations prevent you from seeking the compensation you deserve. We understand the unique challenges self-employed individuals face and can help you build a strong wage loss claim as part of your personal injury case.
If you have been injured, please reach out to our experienced attorneys at Aaron Ferguson Law for a free consultation. We'll review your specific situation and help you understand what documentation you'll need to maximize your wage loss recovery.
