Calculating Lost Wages in Pennsylvania: What Income Counts?

Disclaimer: This article is for informational purposes only and does not constitute legal advice.

Detailed Answer

Under Pennsylvania law, a person injured by another’s negligence may recover compensatory damages for lost wages. These damages include both past and future income losses. In an auto-accident context, Personal Injury Protection (PIP) benefits cover a portion of lost earnings. See 75 Pa.C.S. § 1713. In general tort claims, courts allow recovery for:

• Base salary or hourly wages: The regular, pre-injury pay rate.
• Overtime pay: Documented overtime hours you couldn’t work due to injury.
• Bonuses and commissions: Incentive compensation that you lost.
• Tips and service charges: Gratuities you otherwise would have earned.
• Self-employment income: Net profits you missed as a contractor or business owner.
• Fringe benefits: Employer contributions to health insurance, retirement plans, paid vacation, sick leave and other benefits tied to your employment.
• Future wages and earning capacity: Anticipated raises, promotions or diminished ability to earn due to lasting injury.
• Other sources of income: Regularly received stipends, royalties or rental income directly tied to your labor.

To establish each category, gather pay stubs, W-2s, tax returns, employment contracts and benefit summaries. If you have a permanent impairment, Pennsylvania courts permit recovery for reduced future earning capacity as part of your total damages (see wrongful death framework at 42 Pa.C.S. § 8301 for an analogous measure of lost earnings).

Helpful Hints

• Keep detailed records of all income sources, including pay stubs, tax filings and benefit statements.
• Note any unpaid time off—vacation or sick leave—you used because of your injury.
• Track overtime, bonuses and tips separately to show what you would have earned but for the injury.
• If self-employed, use profit-and-loss statements, client invoices and tax returns to document lost business income.
• For projected future wages, obtain expert testimony (e.g., an economist) to quantify diminished earning capacity.
• Review your PIP policy limits and timing—lost wage benefits typically pay 85% of gross income per week, up to a statutory cap.
• Consult with a qualified Pennsylvania attorney to ensure you meet all procedural requirements and deadlines.