If you injure yourself at work and are not able to do your job, undoubtedly you will wonder if your workers’ compensation benefits will be the same as when you were working and earning wages from your employer. It’s a complicated question because it depends on how much money you were making at the time you were injured. Furthermore, while your wages are taxed (unless you’re a 1099 worker), your workers’ comp. benefits are not. Let’s go through and look at the various scenarios.
First, we have to explain how your weekly workers’ comp. rate is calculated. Pennsylvania workers’ comp. law provides a complicated formula to make this calculation. If you have been employed by your employer for at least a year, your gross wages (before taxes) for the four quarters preceding your injury are calculated by your employer. For example, if your injury occurred on February 1, 2025, your wages would be computed for these quarters: February 1, 2024–April 30, 2024; May 1, 2024–July 31, 2024; August 1, 2024–October 30, 2024; and November 1, 2024–January 31, 2025. After your wages per week for the four three-month periods is determined, the average of the three highest numbers comprises your “average weekly wage.” The rules are different if you have been employed by your employer for less than a year, but an average weekly wage will still be determined that will accurately and realistically reflect what you earned or would expect to earn per week for your employer.
If you are a very high wage earner — your average weekly wage is $2,020.51 (this translates to annual wages of slightly more than $105,000) or higher — your weekly workers’ comp. benefits are capped at $1,347 per week. (This is assuming your injury occurred in 2025; if your injury occurred before 2025, your workers comp. rate will be even lower.) This means that if you earn $120,000 per year, $175,000 per year, $250,000 per year – any amount more than $105,000 per year — you will still only be entitled to $1,347 a week in workers’ comp. benefits. Under these circumstances, your workers’ comp. benefits will be considerably lower than the wages you earned for your employer.
If your average weekly wage falls between $1,010.26 and $2,020.50, your workers’ comp. rate will be 2/3 of your average weekly wage. So if you earned $1,500 a week in wages at your job, your workers’ comp. rate would be $1,000; if you earned $1,200 a week in wages, your workers’ comp. rate would be $800. Because taxes are deducted from your paycheck (federal, state, and local), you would take home, give or take, the same amount in workers’ comp. benefits as you were earning in wages. And because your workers’ compensation benefits are not taxable — you don’t have to report them on your tax return — you’re not going to have to pay any taxes on your workers’ comp. benefits. That’s the purpose behind the workers’ compensation law – to make an injured worker whole so they are not losing money while on workers’ comp. For every injured worker except very high wage earners, the purpose of the law is fulfilled.
If your average weekly wage is between $748.33 (which equates to almost $39,000 per year) and $1,010.25 (which equates to about $52,500 per year), your weekly workers’ comp. rate will be $673.50. If you are in this bracket, the lower your wages are, the more likely you will “take home” more in workers’ comp. benefits than you did from wages at your job. For example, if you earned $775 per week in wages from your employer, your workers’ compensation benefits would only be $101.50 per week less than your wages. In all likelihood, more than $101.50 would be deducted in taxes so your workers’ comp. check would be higher than your paycheck. But if you earned wages at the high end of the bracket, your workers’ comp. check would be comparable to your paycheck but probably not more.
The final bracket is for injured workers who earn $748.32 or less per week. If you fall in this category, your workers’ compensation benefits will be 90 percent of your average weekly wage. If your average weekly wage is $600, your workers’ comp. check will be $540; if your average weekly wage is $400, you will receive a workers’ comp. check in the amount of $360. Therefore, your check on workers’ comp. will exceed your take home pay while you were working.
All of these scenarios presuppose that the workers’ comp. insurance company for your employer actually accepts your claim and pays you workers’ compensation benefits. Often times, even if your injury was clear cut, the insurance company will deny your claim, requiring you to hire a lawyer to file a claim petition for benefits on your behalf. If you find yourself in this unpleasant predicament, we urge you to contact the firm of Pearson Koutcher Law. At Pearson Koutcher, workers’ comp. is all we do — we handle workers’ comp. cases and nothing else. Each of our workers’ compensation lawyers has represented injured workers in workers’ comp. cases for more than 25 years and will zealously represent you in your case. Even if the insurance company initially accepts your case, down the road they may file a petition to terminate, suspend, or modify your benefits. Pearson Koutcher will fight the insurance company tooth and nail to preserve your benefits. If there are any other issues in your case – for example, they miscalculate your average weekly wage, which results in your workers’ comp. check being too low – we will try to resolve these issues to your benefit. Please contact Pearson Koutcher Law for a free, comprehensive consultation.