Understanding how your workers' comp weekly benefit is calculated is critical — a mistake in calculating your average weekly wage (AWW) can cost you thousands of dollars over the life of your claim. Here's exactly how it works.
What Is the Average Weekly Wage (AWW)?
Your workers' comp weekly benefit is based on your Average Weekly Wage — the average amount you earned per week before your injury. Most states calculate AWW using your earnings during the 52 weeks before your injury date. Your weekly benefit is typically 2/3 (66.67%) of your AWW, subject to a state maximum and minimum.
What Counts Toward Your AWW?
Your AWW should include: regular wages and salary, overtime pay, tips and gratuities, bonuses (if regular), commissions, second job income (in some states), and the value of employer-provided housing or meals. Many workers lose money because they or their employer forgets to include overtime, tips, or part-time work income in the AWW calculation.
How to Calculate Your AWW
Add up all earnings in the 52 weeks before your injury and divide by 52. Example: If you earned $65,000 in the year before your injury, your AWW = $65,000 ÷ 52 = $1,250/week. Your workers' comp benefit would be 2/3 × $1,250 = $833/week (subject to state maximum). If you worked less than 52 weeks, different formulas apply.
State Maximum and Minimum Benefit Amounts
Every state sets a maximum weekly benefit that caps your workers' comp payment regardless of your actual earnings. High earners are often most affected — if your state's maximum is $1,000/week but your 2/3 calculation yields $1,500/week, you're capped at $1,000. State minimums ensure even part-time and low-wage workers receive some protection.
Common Errors in AWW Calculation
AWW is miscalculated more often than you'd expect. Common errors include using only the 13 weeks before injury instead of 52, excluding overtime that was regular and expected, ignoring income from a second job, using gross wages instead of the correct earnings figure, and failing to account for seasonal variations in pay. Always review the AWW calculation with an attorney before accepting any settlement.
Appealing an Incorrect AWW
If your employer or insurer calculated your AWW incorrectly, you have the right to dispute it. Gather pay stubs, W-2s, and tax records for the year before your injury. An attorney can file a petition to correct the AWW and recover any benefits you were underpaid going back to the date of injury.
Need a workers' comp attorney? The information in this guide is general in nature. For advice about your specific case, consult a licensed workers' compensation attorney in your state. Free consultations are available — find an attorney near you.