How to Calculate Your Average Weekly Wage for Workers' Compensation

Many injured workers search for information about the average weekly wage (AWW) because that term is commonly used in workers’ compensation systems across the country. In Washington, however, wage-loss benefits are typically calculated using a monthly wage figure at the time of injury rather than a strict 52-week average. This calculation directly affects the amount of time-loss compensation you may receive.

Lehmbecker Law's Seattle workers' compensation attorneys help injured workers who receive less than they deserve due to incorrect wage calculations. This guide explains how wage calculations work in Washington workers’ compensation claims, what income may be included in the calculation, and the factors that can affect the final wage figure.

What Is an Average Weekly Wage

While many states rely strictly on an average weekly wage formula, Washington workers’ compensation claims typically use a monthly wage calculation based on earnings at the time of injury.

Your AWW serves as the starting point for calculating several types of disability benefits:

• If you can't work at all, Temporary Total Disability pays you two-thirds of your AWW.
• For permanent disabilities preventing any work, Permanent Total Disability also provides two-thirds of your AWW.
• When you can work but earn less than before because of your injury, Temporary Partial Disability pays two-thirds of the difference between your current AWW and pre-injury AWW.

Each type of benefit is calculated using specific formulas established by Washington State Law, with rates that consider your marital status and number of dependents.

How Washington Calculates Wages for Workers’ Compensation

Workers’ compensation benefits depend on the worker’s wage level at the time of the injury. In Washington, the state typically uses a monthly wage figure based on all employment at the time of injury, rather than relying strictly on a nationwide average weekly wage formula.

The governing rule appears in RCW 51.08.178, which defines wages for workers’ compensation claims.

The wage figure usually reflects:

• The worker’s gross earnings
• Wages from each job held at the time of injury
• Certain employer-paid benefits tied to employment

WAC 296-14-520 also requires the wage calculation to fairly represent the worker’s earnings when determining benefits. Because the calculation may include several sources of income and employment records, the final wage amount can differ from a worker’s regular paycheck.

Income That May Count Toward Your Wage Calculation

A worker’s wage calculation includes more than base salary or hourly pay. Washington law allows several types of job-related income to be considered when determining wage levels for workers’ compensation benefits.

Common examples include:

• Regular wages or salary
• Overtime pay
• Bonuses or commissions tied to job performance
• Tips reported as income
• Employer-paid health insurance benefits (if the employer stops providing them during the disability period)

These rules appear in RCW 51.08.178, which defines wages for workers’ compensation claims.

However, not everything counts toward your AWW. Under RCW 51.08.178, employer-paid health insurance may be included in wage calculations unless the employer continues providing the benefit during the disability period. Paid time off and vacation pay usually don't factor into the calculation either.

Calculating Temporary Total Disability Benefits in Washington

Workers who cannot perform their job duties after a workplace injury may receive time-loss compensation, which functions as temporary total disability benefits.

Washington law bases these payments on the worker’s wage level at the time of injury. The calculation is governed by RCW 51.32.060.

In most cases, time-loss benefits equal 60% to 75% of the worker’s wages, depending on family status and the number of dependents.

For example:

• Workers with no dependents generally receive about 60% of their wages.
• Additional benefits may apply if the worker has a spouse or dependent children.

The state also applies minimum and maximum benefit limits, which are adjusted each year based on Washington’s average monthly wage. Because these benefits depend directly on the wage calculation in a workers’ compensation claim, errors in reported wages or missing income records can reduce the total amount a worker receives.

Methods Used to Calculate Wages in Different Work Situations

Workers’ compensation benefits depend on the worker’s earnings at the time of the injury. In Washington, the state usually calculates wages based on the worker’s monthly income across all employment, rather than relying on a strict 52-week average.

Situation 1. Full-Time Employee with One Job

For a worker employed full-time with one employer, the wage calculation usually begins with the employee’s gross earnings before the injury. Regular wages and overtime pay may be considered when establishing the wage level used for workers’ compensation benefits. This amount helps determine the disability benefit rate paid during recovery.

Situation 2. Recent Employment or Job Changes

If you worked less than a year before your injury, the calculation changes. The insurance company might divide your total earnings by the number of weeks worked. Sometimes, they'll look at wages earned by a similar employee who has worked the full year to establish a fair rate.

Situation 3. Multiple Jobs and Concurrent Employment

Many injured workers hold more than one job, which can significantly affect their benefits. In cases of concurrent employment where job duties are similar, earnings from both positions might count toward your AWW. However, if your second job involves different duties, those wages may not be included. This distinction often requires careful analysis by a workers' compensation lawyer.

Situation 4. Seasonal or Intermittent Workers

Some workers do not work a regular full-year schedule. Construction workers, agricultural workers, and other seasonal employees may have earnings that vary throughout the year. When regular wages do not accurately represent income, the state may examine earnings from a representative twelve-month period under RCW 51.08.178(2) to determine a wage figure that reflects the worker’s typical earnings. This accurate wage calculation is especially important when evaluating long-term pension and structured settlement options for seriously injured workers.

Example: A seasonal construction worker earned $36,000 during the past year, but the work was not performed year-round. Dividing $36,000 by 12 months results in an estimated $3,000 monthly wage, which may then be used to determine workers’ compensation benefits if the worker cannot return to work after the injury.

Common Average Weekly Wage Calculation Mistakes

Insurance companies often make mistakes when determining an injured worker's AWW. These errors can significantly reduce your benefits over time. Watch out for:

• Overlooking recent pay increases
• Missing regular overtime patterns
• Incorrectly excluding bonuses or commissions
• Failing to account for concurrent employment
• Using the wrong time period for calculations
• Mishandling variable work schedules

Even small errors in an average weekly wage calculation can reduce disability benefits for months or even years. Injured workers should review the wage figure used in their claim and compare it with their pay stubs, time sheets, and tax records.

When Wage Calculations Are Disputed in a Workers’ Compensation Claim

Disputes sometimes arise over how a worker’s wages are calculated in a Washington workers’ compensation claim. Because disability benefits depend on the wage figure assigned to the claim, even small reporting errors can affect the total amount paid during a period of disability.

Workers typically rely on pay stubs, tax returns, time sheets, and employment records to demonstrate their total earnings prior to the workplace injury. Reviewing these records early in the claim can help correct the wage figure used to determine disability benefits.

Closing Considerations for Wage Calculations

Workers’ compensation wage calculations may seem straightforward, but over time, multiple jobs, seasonal work, and reporting errors can reduce the benefits you receive. If your time-loss payments seem lower than expected, the wage calculation used in your claim may need review.

At Lehmbecker Law, our Seattle workers’ compensation attorneys help injured workers challenge incorrect wage calculations. Contact us today for a free consultation to protect your right to full workers’ compensation benefits.