When you suffer an injury due to someone else’s negligence, you are entitled to seek compensation for all financial losses, including lost earnings. Lost income is a key form of economic damages in personal injury law and helps ensure you’re not left financially strained due to missed work.

Below is a detailed breakdown of how lost earnings and diminished earning capacity are calculated and claimed in Georgia personal injury cases.

Background: Proving Negligence

Most personal injury claims are based on negligence, and to win such a case, you must prove these four legal elements:

1. Duty of care – The defendant owed you a legal responsibility to act with reasonable care.
2. Breach of duty – They failed to meet that duty.
3. Damages – You suffered real harm, including financial loss.
4. Causation – Their breach directly caused your injuries and damages.

If you successfully prove negligence, you can pursue both economic (e.g., lost wages, medical bills) and non-economic (e.g., pain and suffering) damages.

Important Note: Work-Related Injuries May Fall Under Workers’ Compensation

If your injury happened on the job, your case might be limited to Georgia’s workers’ compensation system. In that case:

• You generally cannot sue your employer, even if they were negligent.
• You don’t need to prove fault to qualify for benefits.
• However, your compensation is limited, particularly when it comes to pain and suffering.

You may still file a personal injury lawsuit against third parties (such as a subcontractor or manufacturer) if they played a role in causing your injury.

Why Maximum Medical Improvement (MMI) Matters

Maximum Medical Improvement (MMI) is when your doctor determines that your condition is unlikely to improve further. This point is critical for:

• Accurately estimating lost income
• Calculating future lost earnings or diminished earning capacity
• Avoiding undervaluation of your claim

In cases involving permanent disability, it may be necessary to make projections before reaching MMI—but such projections should involve expert input.

How to Calculate Lost Earnings

Lost earnings refer to the income you would have received if not for your injury. The method of calculation depends on your employment type.

Hourly Wage Earners

Lost earnings = hourly rate × hours missed

Example:
$30/hour × 8 hours/day × 4 days = $960

Salaried Employees

1. Determine your monthly or annual salary
2. Calculate the daily rate (e.g., salary ÷ average working days per month)
3. Multiply by the number of workdays missed

Evidence such as pay stubs and HR records will be needed to back up your claim.

Freelancers and Entrepreneurs

For self-employed individuals or gig workers:

• Use income records from prior months (or years) to determine average monthly income
• Adjust for seasonal income if necessary
• Present tax returns, invoices, and bank records as evidence

Vacation and Sick Leave

If you used personal or sick leave due to your injury, you can still claim compensation:

Why? Because that leave is a valuable benefit you lost access to for future use.

Other Compensable Income-Related Losses

Overtime Pay

You can claim the value of overtime you would have earned based on past work habits or seasonal trends.

Lost Benefits

This includes:

• Retirement plan contributions (401(k), IRA)
• Health insurance premiums
• Performance bonuses

These are quantifiable and should be documented with employer statements and policy documents.

Lost Business Opportunities

These are harder to prove but potentially significant. Examples:

• Missing a keynote speaking opportunity
• Inability to attend a sales conference
• Lost client contracts

Expert testimony or business projections may be needed to substantiate the loss.

Diminished Earning Capacity

If your injury results in:

• Permanent disability
• Reduced ability to work full-time
• Forced early retirement

...you may claim diminished future income. Calculating this requires financial and occupational experts to:

• Analyze your age, career trajectory, and industry salary trends
• Estimate total earnings you would have made vs. what you can earn post-injury

This number could be substantial, especially for younger individuals or those with high-earning potential.

Proving Lost Earnings in Court

Evidence used to support lost earnings or earning capacity may include:

• Pay stubs and tax returns
• Employer confirmation letters
• Medical records and doctor’s work restrictions
• Expert witness reports (vocational, economic, and medical)
• Bank records and profit/loss statements (for business owners)

Every claim must be substantiated by reliable documentation to be admissible in court.

Consult a Lawrenceville Personal Injury Lawyer Today

Calculating and proving lost earnings—especially future losses—is not straightforward, especially if your employment status is non-traditional or if you're permanently disabled.