When you’re hurt in a personal injury accident—whether it's a car crash, slip and fall, medical malpractice, or defective product—the damage isn’t just physical. You’re also dealing with financial stress, emotional strain, and time away from work. Under Pennsylvania law, you have the right to seek compensation from the at-fault party, and that includes your lost income.
Loss of income damages are one of the most critical financial tools accident survivors have to rebuild their lives. But calculating those damages isn’t as simple as looking at a pay stub. It takes a detailed understanding of your wages, benefits, job history, and future prospects.
What Does Loss of Income Look Like in Real Life?
Let’s say a warehouse worker injures his shoulder in a trucking accident caused by a distracted driver. He’s out of work for six months recovering from surgery and physical therapy. In that time, he misses out on his regular paycheck, overtime hours, and a quarterly bonus. When he finally returns to work, he’s unable to lift as much weight or take on the same shifts, so he takes on a new role with lighter duties (and less pay). His injury permanently limits his earning capacity.
All of that—his time off, his missed opportunities, and the long-term impact on his earnings—is compensable. If he brings the right evidence to court, he could claim income losses as part of his damages.
How Do You Calculate Lost Earnings?
Loss of income damages typically include three components:
Lost Wages
These are the wages you lost during the time you were physically unable to work. If you're an hourly worker, it's your hourly wage multiplied by the hours you missed. If you're salaried, it's your weekly pay multiplied by the number of weeks missed. Don’t forget to include overtime and bonuses if they were a regular part of your earnings.
Lost Future Earnings
This covers the income you’ll miss out on in the future due to your injuries. If you can’t return to your previous job or if your injuries limit your ability to earn what you once did, you're entitled to the difference. Calculating future earnings requires a look at your age, expected career path, work history, education, and the nature of your injury. Often, a vocational expert and an economist will be brought in to give a full picture of your expected losses.
Loss of Earning Capacity
Even if you can return to work, you may not earn as much as you did before. Loss of earning capacity covers the difference. For example, if you were a mechanic but now can only work in a light-duty role for fewer hours, that drop in earning power is a recoverable damage.
Are Sick Leave and Vacation Time Included?
Yes. If you use up your sick days or vacation time to recover from an accident, you’re entitled to recover those lost days. They represent time you could have used for future illness or personal time but were forced to spend on recovery because of someone else’s negligence.
How to Document a Loss of Income
Proving loss of income requires strong documentation. Here’s what helps:
- A letter from your employer stating your job title, pay rate, and how much time you missed.
- Pay stubs, W-2s, or past tax returns.
- Work schedules or invoices if you're self-employed.
- Statements showing bonuses or overtime regularly earned.
If you're a contract or freelance worker, documentation of your yearly average income can also establish your typical earnings.
Self-Employed? You Can Still Claim Lost Income.
Independent contractors and small business owners can recover loss of income damages too. It just requires different documentation. Tax returns, 1099s, bank statements, and client invoices can help establish your average earnings. You may also need testimony from an accountant or industry expert to prove your expected earnings had the accident not occurred.
Watch Out: Insurance Companies Try to Minimize These Claims
Insurers are notorious for downplaying loss of income. They may:
- Argue that you could have returned to work sooner
- Dispute your documentation
- Ignore your future earnings or earning capacity
They count on your being too overwhelmed or underinformed to fight back. That’s where having an experienced attorney makes all the difference. We’ll build a rock-solid case for every dollar you’ve lost—and every dollar you will lose—because of your injury.
What About Less Obvious Losses?
Sometimes, your injuries prevent you from taking a new job or accepting a promotion. These lost opportunities are harder to quantify but still valid. With the right legal strategy and supporting evidence, we can help argue for compensation that reflects what you’ve truly lost—even if it wasn’t on your current payroll.
Contact Handler, Henning & Rosenberg to Learn Your Options
Calculating loss of income is complex. If your lawyer doesn’t dig deep or bring in the right experts, you could leave money on the table. At Handler, Henning & Rosenberg LLC, we’ve helped clients recover tens of millions in compensation by fighting for every cent they deserve.
If you’ve been hurt and missed work, call us at (888) 498-3023 or contact us online for a free consultation. Let’s talk about what you’ve lost—and how we can help you get it back.