Workers’ Comp Lost Wages Claim In Michigan: Overview

In Michigan, workers’ comp pays lost wages equal to 80% of your after-tax average weekly wage, calculated based on your highest-earning 39 weeks out of the 52 weeks prior to your injury, including overtime. Benefits begin after a 7-day waiting period and continue for as long as you remain disabled and unable to earn wages. The maximum weekly benefit is capped at 90% of the State Average Weekly Wage (SAWW).

What workplace injury benefits can I receive?

In Michigan, if you are injured in the course and scope of your employment, you are entitled to specific workers’ comp benefits, including lost wages, medical treatment and vocational rehabilitation.

Workers’ compensation is a compromise between employee and employer interests. You don’t have to prove negligence to get compensation, but you are limited in what benefits you can receive.

Pain and suffering is not available. This might seem like an unfair system but the amount of benefits paid can be substantial.

Does workers’ comp cover lost wages in Michigan?

In Michigan, workers’ comp covers lost wages with wage loss benefits. The amount paid should equal 80% of their after-tax average weekly wage. This is based upon the highest 39 paid weeks out of the 52 weeks before the accident. Overtime, discontinued fringe benefits, and second jobs should be included in the calculation.

Many injured employees throughout the state are surprised to learn they may be receiving less than they are legally entitled to. Insurance companies frequently make calculation errors — and those errors are never in your favor. Common mistakes include failing to include overtime or bonus pay, using the wrong number of dependents, applying the incorrect tax filing status, or excluding income from a second job. Each of these errors can significantly reduce your weekly benefit amount. If you have any doubt about whether your wage loss rate is correct, an experienced attorney can review your earnings records and identify any underpayment.

Can I sue for workers’ comp lost wages in Michigan?

In Michigan, you generally cannot sue your employer for lost wages outside of the workers’ compensation system — the no-fault workers’ comp system is the exclusive remedy for most work-related injuries. However, in Michigan, you may be able to sue a third party, such as a negligent contractor, equipment manufacturer, or another driver if you were injured in a work-related vehicle accident, for additional compensation including pain and suffering and full lost wages beyond what workers’ comp provides. An experienced workers’ compensation attorney can help determine whether a third-party claim is available in your situation.

What is compensation for lost wages in Michigan workers’ comp?

Compensation for lost wages in Michigan workers’ comp refers to wage loss benefits paid to an injured employee who is unable to work or has reduced earning capacity due to a work-related injury or illness. In our state, wage loss benefits equal 80% of your after-tax average weekly wage based on your highest 39 weeks of earnings in the 52 weeks before your injury. Overtime, bonuses, discontinued fringe benefits, and income from a second job should all be included in the calculation.

It is important to understand that wage loss benefits are not simply a percentage of your current paycheck. The calculation is based on your full earning potential — meaning all sources of job-related income must be considered. If you worked significant overtime in the year before your injury, had employer-paid benefits that were discontinued after the accident, or held a second job, those amounts can substantially increase your average weekly wage and, in turn, your weekly benefit rate. Insurance companies have a financial incentive to undercount these figures, which is why having an attorney verify the calculation before benefits are set can make a significant difference in the total amount you receive over the life of your claim.

How to calculate workers’ comp loss ratio for lost wages in Michigan?

In Michigan, workers’ comp lost wages are calculated using your after-tax average weekly wage. To determine your benefit rate, first calculate your average weekly wage by taking your highest 39 weeks of earnings out of the 52 weeks before your injury — including overtime, bonuses, discontinued fringe benefits, and income from a second job. Then use the wage chart published by the WDCA to find your specific benefit rate based on your number of dependents and tax filing status. In general, your weekly benefit will equal approximately 80% of your after-tax average weekly wage, subject to a maximum of 90% of the State Average Weekly Wage — which produced a maximum weekly benefit of $1,201 in 2026.

Because the calculation involves multiple variables — tax filing status, number of dependents, overtime history, fringe benefits, and second job income — even small errors can compound into significant underpayments over time. An employee receiving $50 less per week than they are legally entitled to will lose more than $2,600 over the course of a year. Insurance companies rely on injured employees not checking the math. If you are unsure whether your benefit rate was calculated correctly, an experienced attorney can review your earnings records, identify any discrepancies, and take action to correct the rate before more benefits are forfeited.

What are the types of wage loss benefits?

• Temporary Total Disability (TTD) Benefits – Pays about 80% of your after-tax average weekly wage if you are completely unable to work due to a work-related injury or illness.
• Temporary Partial Disability (TPD) Benefits – Provides partial wage loss benefits when you’re able to return to work with restrictions and earn less than before the injury.
• Permanent Partial Disability (PPD) – Scheduled Loss Benefits – Offers set weekly payments for a specific number of weeks if you permanently lose the use of a body part, such as a finger, hand, or eye.
• Permanent Partial Disability (PPD) – Unscheduled Loss Benefits – Covers permanent impairments that are not listed in the schedule and result in partial wage-earning capacity loss.
• Permanent Total Disability (PTD) Benefits – Provides long-term benefits when your injury results in a complete and permanent inability to work in any capacity.
• Death Benefits – Pays weekly benefits to surviving dependents for up to 500 weeks, along with funeral and burial expenses, if a worker dies from a job-related injury.
• Partial Wage Loss (Post-Injury Employment) – Compensates the difference when you return to work at a lower-paying job because of injury-related restrictions.
• Vocational Rehabilitation (Wage Restoration Support) – While not direct wage replacement, this benefit helps injured workers return to suitable employment through training and job placement assistance.

Am I receiving the correct amount?

We frequently run into injured employees in Michigan who have no idea how much they’re supposed to be receiving with workers’ comp lost wages claim. These individuals often assume they are receiving the correct weekly rate — without checking the math themselves.

You should know that insurance companies frequently make mistakes and those mistakes are never in your favor. Our attorneys have actually seen injured employees receiving thousands of dollars less than the law requires.

How to calculate workers’ compensation wage loss benefits in Michigan?

In Michigan, to calculate how much workers’ compensation wage loss benefits you should be receiving, you must first compute your average weekly wage. This is an average of the highest 39 weeks of the 52 weeks preceding your work injury. If you have worked less than 39 weeks, just divide the total amount that you have earned by the total weeks you have worked.

You should include overtime, premium pay, and bonuses in the average weekly wage calculation. You may also be able to include discontinued fringe benefits, such as the value of health insurance, to increase the average weekly wage.

You can also increase your average weekly rate if you were working a second job. Employers and insurance companies will never tell you about that. Your average weekly wage will be based upon the total wages from both jobs. This could substantially increase the amount of wage loss benefits available to you.

How much does workers’ comp pay for lost wages in Michigan?

In Michigan, the amount workers’ comp will pay for lost wages will be 80 percent of your after-tax average weekly wage. To calculate this amount, you must use the tables published by the State of Michigan.

You will need to know how many dependents you have and your tax filing status. Find the average weekly wage column and select the appropriate number of dependents and tax filing columns. This will you give you your weekly benefit rate. In general, this amount is usually about 60 percent of your gross weekly income.

You should also know that the amount of Michigan workers’ comp lost wages benefits available is subject to a specific maximum. The highest weekly amount allowed in 2026 was $1,201. This is based upon the state average weekly wage of $1,333.88. No employee is allowed to receive compensation above 90 percent of the state average weekly wage.

This can be devastating for a high wage earner who is now faced with a substantial loss of income.

What if I’m found to be only partially disabled?

Recent changes to Michigan workplace injury law have complicated how workers’ comp lost wages are calculated. If it is determined that you are only partially disabled and have a wage earning capacity, your wage loss benefits can be reduced or stopped. It does not matter if you are actually working or not. This change in the law is ripe for abuse and you should contact an experienced lawyer if this happens.

What is my wage earning capacity and why does it matter?

The issue of wage earning capacity can be very complicated. Think of wage earning capacity as your ability to earn wages in other employment taking into consideration your work-related injury. Your employer and its insurance company may think you can work but you might not be able to find a job within your restrictions. The insurance company wants to find that you have a wage earning capacity to reduce the amount that needs to be paid for your Michigan workers’ comp lost wages claim.

Can the amount wage loss benefits I receive change?

Your rate is generally fixed at the time of your injury. It stays the same even if the economy changes, your job is eliminated or your employer files bankruptcy. You are entitled to wage loss benefits as long as you are disabled and cannot work.

You might also be entitled to differential wage loss benefits if you return to work but at less pay. Differential wage loss is the difference between what you’re earning now and what you could earn before the injury.

If your employer or its insurance company decides that you are only partially disabled then your Michigan workers’ comp lost wages amount can be changed. You will be sent to a vocational rehabilitation counselor for an employability and wage earning capacity analysis. You will be asked about your educational background, work history, and job search efforts. The vocational rehabilitation counselor will then review medical records, perform a transferable skills analysis, and give an opinion about whether you can find other work.

The vocational rehabilitation counselor is hired by the insurance company and they have an agenda. The employability and wage earning capacity analysis is not always a fair assessment. You may be told that you can work in a field that you have never considered or told that a job exists when it does not. If you are scheduled to meet with a vocational rehabilitation counselor, it is a good idea to call a lawyer immediately.

When does workers’ comp start paying for lost wages in Michigan?

In Michigan, workers’ comp lost wages benefits generally begin on the 8th consecutive day of disability. There is a 7-day waiting period that starts on the first day you’re unable to work because of your work-related injury or illness. The waiting period is measured in consecutive calendar days, including weekends and holidays. (MCL 418.311)

If your disability lasts 14 consecutive days or longer, you become entitled to wage-loss benefits for the initial 7-day waiting period as well. (MCL 418.311)

Although benefits legally begin accruing on the eighth day of disability, injured workers do not necessarily receive their first check on that day. Workers’ compensation benefits are generally paid on a weekly basis. (MCL 418.351) According to statistics published by the Workers’ Disability Compensation Agency, it can take an average of approximately 17 days after a work injury is reported for the first wage-loss payment to be issued.

Can you claim workers’ comp lost wages on taxes?

In Michigan, workers’ comp lost wages payments made under are income tax free. This is because these payments are calculated using the “after-tax” value of an employee’s average weekly wage. We recommend consulting a tax professional to determine if a tax return needs to be filed and what must be claimed.

What happens if I’m receiving the wrong workers’ comp lost wages rate?

In Michigan, many disputes occur because your employer or its insurance company are paying weekly benefits at the wrong workers’ comp lost wages rate. If you suspect that you are receiving the incorrect rate, you must call an experienced workplace injury attorney for help. An experienced attorney can take a look at your wage records and tell you whether you are receiving the correct rate. For help from an attorney now, call us at (844) 266-7302. There call is free and the advice is free.

Insurance companies often will fail to include your overtime or bonus pay. They will also tell you that other work is available when it is not.

Sometimes, the insurance company will use the wrong number of dependents or the wrong tax filing status. These errors can dramatically affect the amount of wage loss benefits that you receive.

Because of a recent State Supreme Court decision called Stokes v. Chrysler, some employers and insurance companies are reducing wage loss benefits based upon a hypothetical ability to earn wages in other employment. You should speak with an experienced attorney immediately if this occurs.

References and Resources

• State Department Of Labor And Economic Opportunity – Employees — Know Your Rights
• State Department Of Health & Human Services

Injured on the job in Michigan and need help with your workers’ comp lost wages claim?

If you were injured on the job in Michigan and you need help with your lost wages claim, call now at (844) 266-7302 or fill out our contact form for a free consultation with an experienced workers’ comp lawyer. There is absolutely no cost or obligation. We’re here for you.

For more than 40 years, our lawyers have been helping people like you who have suffered from on-the-job injuries throughout the state. We understand the physical, emotional, and psychological hardships you are experiencing from your accident. We also have the skill, experience, and know-how to protect you and get you the best possible payout amount for your case.

To see what our own clients have to say about the caring, compassion, and communication they received from us, you can read in their own words about their experience here on our testimonials page from clients we have helped.

Remember, every work injury claim and settlement is different and must be negotiated on its own merits. Do not accept any payout amount without fully understanding your legal rights.