How Workers' Compensation Benefits Are Calculated per Paycheck

Basic Formula for Each Paycheck

Workers' compensation benefits are typically a percentage of the employee's average weekly wage (AWW), multiplied by the number of weeks covered in each pay period. Most states use 66% of the AWW for temporary total disability, while some use 60% or 80% depending on the jurisdiction.

Determining the Average Weekly Wage

The AWW is calculated by adding the employee's earnings over the 52 weeks before the injury and dividing by 52. If the employee worked less than a year, the total earnings are divided by the actual weeks worked, then annualized.

Applying State‑Specific Rates

Each state sets its own disability rate and may adjust it for factors such as age, occupation risk, or prior claims history. For example, California uses 66⅔% of the AWW, while Texas caps temporary total disability at 70% of the AWW with a maximum dollar limit.

Frequency and Pay Period Adjustments

Benefits are paid according to the employer's payroll schedule—weekly, bi‑weekly, or monthly. To convert the weekly benefit amount to a bi‑weekly check, simply double the weekly figure; for monthly, multiply by four (or use the exact number of weeks in the month for precision).

Sample Calculation Table