Demystifying Workers’ Comp: How Are Workers’ Comp Benefits Calculated in California?

Learn how workers' comp benefits are calculated in California and why to work with a workers' comp attorney.

If you’ve been injured on the job in California, you may be entitled to workers’ compensation benefits, and you are likely wondering, How are workers’ comp benefits calculated? Many injured workers find the formulas confusing, leaving them unsure about how much they’ll receive, or if they’re being paid fairly.

At SoCal Workers Comp, we believe transparency is key. In this guide, we’ll break down how workers’ comp benefits are calculated, including wage replacement, temporary vs. permanent disability, and the role of medical costs.

By the end, you’ll have a clearer understanding of what to expect and how to ensure you’re getting the full benefits you deserve. So, let’s get into it.

How Are Workers’ Comp Benefits Calculated in California?

Workers’ comp benefits are designed to cover:

Medical treatment related to your work injury
Wage replacement if you can’t work (temporary disability)
Long-term payments if you have lasting impairments (permanent disability)
Supplemental job displacement benefits (if you can’t return to your old job)

The amount you receive depends on several factors, including

Your average weekly wages before the injury
The severity of your injury
Whether your disability is temporary or permanent

So, here’s everything you need to know to answer the question, How are workers’ comp benefits calculated in California?

1. Temporary Disability Benefits: Payments While You Recover

If your injury prevents you from working while you heal, you may qualify for Temporary Disability (TD) benefits. These payments are meant to replace a portion of your lost wages.

How Temporary Disability Is Calculated

Two-thirds of your gross (pre-tax) average weekly wages
Maximum and minimum limits apply (for 2024, the max is $1,619.15/week)

Example:
If you earned $900 per week before taxes, your TD rate would be:
$900 x ⅔ = $600 per week

These benefits continue until:

You return to work
Your doctor says you’ve reached “maximum medical improvement” (MMI)
You hit the statutory maximum of 104 week (for most injuries) on temporary disability

Note: If you can work light duty but earn less than before, you may qualify for Temporary Partial Disability (TPD) benefits, which make up some of the difference.

2. Permanent Disability Benefits: Compensation for Lasting Injuries

If your injury leaves you with a permanent impairment—even if you can still work—you may be eligible for Permanent Disability (PD) benefits.

How Permanent Disability Is Calculated

Unlike TD benefits, PD payments are based on:

Your disability rating (a percentage assigned by your doctor)
Your weekly earnings at the time of injury
Your age and occupation (some jobs are harder to return to after injury)

The formula involves:

Determining your PD rating (e.g., 20% disability)
Applying the rating to a state-mandated payment schedule
Adjusting for your weekly wage and other factors

Example:
A 30-year-old construction worker with a 15% PD rating might receive $290 per week for 70 weeks, while an office worker with the same rating might get a lower amount due to differing job demands.

Disputes over PD ratings are common. Insurers often lowball ratings, so consulting a workers’ comp attorney can help ensure you get a fair evaluation.

3. How Your Wages Affect Your Benefits

Since workers’ comp benefits are wage-based, proving your true average weekly wage (AWW) is crucial. Your AWW includes:

Regular hourly wages
Overtime
Bonuses
Commissions
Other taxable income

If you’re a seasonal worker, part-time employee, or new hire, calculating AWW can be tricky. In these cases, the state uses alternative methods (like comparing similar workers’ wages) to determine your rate.

Keep pay stubs and tax records—they’re key to maximizing your benefits.

4. Medical Treatment & Other Benefits

Workers’ comp also covers:

100% of reasonable medical care (doctor visits, surgeries, prescriptions)
Mileage reimbursement for travel to medical appointments
Vocational retraining (if you can’t return to your old job)

Unlike wage replacement, medical benefits aren’t capped at a percentage—they should cover all necessary treatment. However, insurers sometimes deny or delay care, making legal help essential.

Are You Getting the Full Benefits You Deserve?

Workers’ comp calculations aren’t always straightforward, and it can quickly get complicated when attempting to answer the question, How are workers’ comp benefits calculated? This is because it depends on your unique situation. Common issues include:

Underreported wages (e.g., insurer ignoring overtime)
Disputed disability ratings
Premature benefit cuts

If you suspect your benefits are too low—or if you’ve been denied—you have the right to appeal.

Need Help Calculating Your Benefits? We Can Help.

So, how are workers’ comp benefits calculated in California? Your benefits are determined by a range of factors, such as temporary disability benefits, permanent disability benefits, your wages, medical treatment required, and more. At SoCal Workers Comp, we help injured workers navigate the complexities of California’s workers’ comp system. Whether you need a benefit estimate, help disputing a lowball offer, or guidance on your claim, we’re here to fight for you and ensure you get the benefits you deserve.

Workers’ comp laws can be confusing, but you don’t have to figure it out alone. Reach out to SoCal Workers Comp. We fight for your rights so you can focus on recovery.

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Jeff Guarrera

Associate Attorney

Jeff Guarrera is an Associate Workers' Comp Attorney for SoCal Workers Comp

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