Last updated · By Mustafa Bilgic
How a workers’ comp settlement is calculated
Workers’ compensation is a no-fault system: you receive benefits regardless of who caused the injury, but in exchange you give up the right to sue your employer and you cannot recover pain-and-suffering damages. A settlement (often a “compromise and release” or “clincher”) usually reflects three things:
1. Temporary disability (wage replacement)
While you are off work recovering, most states pay temporary total disability (TTD) at about two-thirds (66.7%) of your average weekly wage, subject to a state weekly maximum and minimum. If you earn $1,200 a week, your rate is about $800 — unless that exceeds your state’s cap, in which case you receive the cap. Multiply the weekly rate by the number of weeks you are off to estimate the temporary benefit.
2. Permanent partial disability (PPD)
Once you reach maximum medical improvement, a physician assigns a permanent impairment rating (often using the AMA Guides). For “scheduled” body parts — an arm, leg, hand, foot, eye and so on — each state sets a number of weeks of benefits. The PPD lump sum is roughly: impairment rating × scheduled weeks × your weekly comp rate. A 10% impairment of a hand scheduled at 190 weeks, at an $800 rate, is about 0.10 × 190 × $800 = $15,200.
3. Medical benefits
Workers’ comp pays your related medical bills. In a full-and-final settlement, future medical care may be bought out for a lump sum (sometimes set aside in a Medicare Set-Aside if Medicare’s interests are involved).
What workers’ comp does and does not pay
- Pays: medical treatment, two-thirds wage replacement, permanent-impairment awards, and vocational rehabilitation in some states.
- Does not pay: pain and suffering, or punitive damages — those are only available in a personal-injury (third-party) claim.
When you can also bring a third-party claim
If someone other than your employer caused your injury — a defective machine, a negligent contractor, or a driver who hit you on the job — you can pursue a separate third-party personal-injury claim for full damages including pain and suffering, on top of comp. The comp insurer usually has a lien to be repaid from that recovery, but you typically still net more.
Federal and state rules vary
Benefit rates, weekly caps and PPD schedules differ in every state, and federal employees are covered separately under programs administered by the US Department of Labor (Office of Workers’ Compensation Programs). Always check your own state’s figures, which this calculator lets you enter directly.
Workers’ comp settlements — frequently asked questions
What is the average workers’ comp settlement?
There is no single average because benefits are set by each state and depend on your wage, time off work and any permanent impairment. Many settlements fall in the tens of thousands of dollars, with serious permanent injuries reaching six figures. Use the calculator with your own wage and impairment figures for a realistic estimate.
How is the weekly workers’ comp benefit calculated?
Most states pay temporary total disability at about two-thirds (66.7%) of your average weekly wage, subject to a state maximum and minimum. So a $1,200 weekly wage yields about $800 a week, unless that exceeds your state’s cap, in which case you receive the cap.
What is a PPD lump sum?
Permanent partial disability compensates a lasting impairment after you reach maximum medical improvement. It is roughly your impairment rating multiplied by the scheduled weeks your state assigns to that body part, multiplied by your weekly comp rate.
Does workers’ comp pay for pain and suffering?
No. Workers’ compensation is no-fault and pays medical care, wage replacement and permanent-impairment awards, but not pain and suffering or punitive damages. Those are only available through a personal-injury claim against a negligent third party.
Is this workers’ comp calculator accurate?
It is a realistic guide using the standard two-thirds wage formula and PPD schedule method, not a guarantee. Actual benefits, caps and schedules vary by state, and settlements involve negotiation. Always confirm with a qualified workers’ comp attorney.