Lost Earnings / Damages Calculator
Estimates total economic damages including past lost wages, future lost earnings, fringe benefits, and pre-judgment interest.
Past Lost Earnings
Future Lost Earnings
Fringe Benefits & Mitigation
Formulas Used
Past Lost Wages (growing sum):
If g ≠ 0: PastWages = W₀ × [(1+g)t − 1] / g
If g = 0: PastWages = W₀ × t
where W₀ = base annual wage, g = annual wage growth rate, t = past years lost.
Past Lost Earnings (with benefits):
PastTotal = PastWages × (1 + b), where b = fringe benefit rate.
Pre-Judgment Interest (simple interest on midpoint):
Interest = PastTotal × r × (t / 2), where r = pre-judgment interest rate.
Future Lost Wages — Growing Annuity Present Value:
Wfuture = W₀ × (1+g)t (wage at start of future period)
If d ≠ g: PV = Wfuture × [1 − ((1+g)/(1+d))n] / (d − g)
If d = g: PV = Wfuture × n / (1+d)
where d = discount rate, n = future years lost.
Net Damages:
Net = (PastTotal + Interest + FutureTotal) − Mitigation
Assumptions & References
- Wages grow at a constant annual rate (geometric growth) over both past and future periods.
- Past lost earnings are summed using a continuous geometric series approximation.
- Pre-judgment interest is calculated as simple interest on the midpoint of the past loss period, a common forensic economics convention.
- Future lost earnings are discounted to present value using the growing annuity formula (Gordon Growth Model variant).
- Fringe benefits (health insurance, retirement, payroll taxes, etc.) are estimated as a percentage of wages; the U.S. Bureau of Labor Statistics reports average benefits at ~30–35% of total compensation for civilian workers (BLS Employer Costs for Employee Compensation).
- The plaintiff has a duty to mitigate damages; replacement earnings are deducted from gross damages (Ford Motor Co. v. EEOC, 458 U.S. 219 (1982)).
- Discount rates typically reflect risk-free rates (e.g., U.S. Treasury yields); wage growth rates often reference BLS Employment Cost Index data.
- This calculator does not include non-economic damages (pain and suffering), punitive damages, medical expenses, or household services losses.
- Reference: Vocational Rehabilitation and Forensic Economics, National Association of Forensic Economics (NAFE); Principles of Forensic Economics, Journal of Forensic Economics.