How Workers’ Compensation Benefits Are Calculated in California

If you’ve been injured on the job in California, understanding how your workers’ compensation benefits are calculated is essential. These benefits help cover medical expenses and provide income while you recover, but the process behind determining the exact amounts can feel complex. As of April 2025, California has updated several key rates and rules, making it more important than ever to stay informed. This guide breaks down the basics of benefit types and how calculations are made so you can better navigate your claim and know what to expect.

Types of Workers’ Compensation Benefits in California

California’s workers’ compensation system provides several types of benefits designed to support injured workers during recovery and beyond. These benefits ensure that employees don’t have to shoulder the financial burden of a work-related injury or illness alone. Each type of benefit serves a specific purpose, depending on the severity and impact of the injury.

Medical Care

This benefit covers all reasonable and necessary medical treatment related to your work injury. It includes doctor visits, hospital care, surgery, physical therapy, medications, medical equipment, and other services required to help you recover. There are no out-of-pocket costs to the injured worker when care is provided through an authorized workers’ comp provider.

Temporary Disability (TD) Benefits

If your injury prevents you from working while you recover, temporary disability benefits provide wage replacement. These benefits are typically two-thirds of your average weekly wage, subject to minimum and maximum limits set annually. TD benefits are paid until your doctor clears you to return to work or determines your condition has reached maximum medical improvement.

Permanent Disability (PD) Benefits

If your injury results in a lasting impairment that affects your ability to work, you may be eligible for permanent disability benefits. The amount is based on a disability rating determined by a physician, which reflects the severity of your impairment. PD benefits are paid out weekly and vary depending on your rating, wages, and date of injury.

Supplemental Job Displacement Benefit (SJDB)

This benefit is available if your injury prevents you from returning to your previous job and your employer doesn’t offer alternative or modified work. You may qualify for a non-transferable voucher worth up to $6,000, which can be used to pay for educational retraining, skill enhancement, or certification programs.

Death Benefits

When a worker dies as a result of a job-related injury or illness, death benefits are paid to their dependents. These benefits include a set amount based on the number of dependents, as well as reimbursement for burial expenses. The goal is to provide financial support to the family members left behind.

Each of these benefits is intended to address a different need—whether it’s medical recovery, lost income, long-term support, or vocational rehabilitation—helping ensure that workers and their families are not left without resources after a workplace injury.

Calculating Temporary Disability (TD) Benefits

Temporary Disability (TD) benefits are designed to partially replace lost wages when a work-related injury or illness prevents an employee from performing their usual job while recovering. In California, the calculation of TD benefits is based on a worker’s average weekly earnings and is governed by statewide limits that are updated annually.

How TD Benefits Are Calculated

As of April 2025, temporary disability benefits are calculated at two-thirds (66.67%) of the worker’s Average Weekly Wage (AWW), up to a legally defined maximum. The AWW is typically based on the gross wages (including overtime, commissions, or other regular earnings) you earned before your injury.

For injuries occurring on or after January 1, 2025, the benefit limits are:

• Minimum weekly TD rate: $252.03
  
  

• Maximum weekly TD rate: $1,680.29
  
  

For example, if your AWW is $1,200, two-thirds of that is $800. Since $800 falls within the minimum and maximum range, you would receive $800 per week in TD benefits.

If your AWW is very low, your benefit will not fall below the minimum of $252.03. On the other hand, if your AWW is high enough to exceed the maximum benefit, you will be capped at $1,680.29 per week, regardless of how much more you were earning.

How Long Do TD Benefits Last?

TD benefits are generally available for up to 104 weeks (two years) within a five-year period from the date of injury. In some cases—such as severe burns or chronic lung disease—benefits may be extended up to 240 weeks.

TD payments stop when:

• You return to work, either in your original job or a modified role,
  
  

• Your doctor determines you’ve reached maximum medical improvement (MMI), or
  
  

• You have received the maximum amount of TD payments allowed by law.
  
  

Understanding how TD benefits are calculated ensures you’re aware of your rights and can confirm that you’re receiving the correct amount during your recovery. If there are discrepancies or delays in your payments, consulting a workers’ compensation attorney or claims specialist can help protect your benefits.

Calculating Permanent Disability (PD) Benefits

Permanent Disability (PD) benefits in California are paid to workers whose injuries result in a lasting physical or mental impairment that affects their ability to earn a living, even after they’ve reached maximum medical improvement (MMI). These benefits are not intended to fully replace lost wages but to provide long-term financial support based on the degree of permanent loss.

Step 1: Receiving a Disability Rating

After you reach MMI, your doctor evaluates your condition and assigns a Whole Person Impairment (WPI) percentage using guidelines from the American Medical Association. This percentage reflects the extent of your impairment and is adjusted using various factors:

• Age and occupation: California’s rating schedule adjusts the WPI based on how the impairment affects someone of your age in your line of work.
  
  

• Standard multiplier: The WPI is typically multiplied by 1.4 to convert it into a disability rating percentage.
  
  

For example, a 10% WPI could result in a final PD rating of 14% after adjustment.

Step 2: Determining Weekly Benefit Amount

Your PD rating determines both the number of weeks you’ll receive benefits and the weekly amount you’ll be paid. As of 2025:

• PD payments range from $160 to $290 per week, depending on your earnings before the injury.
  
  

• The higher your disability rating, the more weeks of benefits you’ll receive.
  
  

For example:

• A 15% PD rating may result in 77.5 weeks of payments.
  
  

• A 30% rating could result in over 200 weeks of payments.
  
  

Step 3: Applying Apportionment (if applicable)

Sometimes, only part of your permanent disability is attributed to your work injury. If a portion of your impairment is due to a previous condition, the doctor may apply apportionment to separate work-related disability from non-work-related factors. Your benefits will be adjusted accordingly.

Step 4: Lump Sum Settlements

You may have the option to resolve your PD benefits through a lump sum settlement—either as a Compromise & Release or Stipulated Findings and Award. These agreements may cover future medical care and close out your case, but should be carefully considered with legal guidance.

Example

Let’s say you have a 20% PD rating, earned $900 per week before your injury, and are eligible for $240 per week in PD payments. You may receive payments for approximately 100 weeks, totaling around $24,000—though exact figures vary based on legal and medical findings.

Understanding how PD benefits are calculated helps ensure you receive the compensation you're entitled to after a lasting injury. Because the system involves medical assessments and legal formulas, consulting a qualified workers' comp attorney or claims specialist can be crucial, especially in cases of dispute or apportionment.

Supplemental Job Displacement Benefits (SJDB)

Supplemental Job Displacement Benefits (SJDB) are designed to help injured workers who are unable to return to their previous job due to a permanent disability. In California, these benefits provide financial support for education, retraining, or skill enhancement to help workers transition into a new occupation.

Who Qualifies for SJDB?

To qualify for SJDB, you must meet the following conditions:

• You sustained a permanent partial disability as a result of a work-related injury.
  
  

• Your employer does not offer regular, modified, or alternative work within 60 days of receiving a doctor’s report stating that you can no longer perform your old job duties.
  
  

• Your injury occurred on or after January 1, 2004, with more specific SJDB regulations applying to injuries on or after January 1, 2013.
  
  

If your employer does offer a job that meets the criteria and you decline it, you may become ineligible for the voucher.

What Does the Benefit Include?

For qualifying workers, the SJDB comes in the form of a non-transferable voucher worth up to $6,000. This voucher can be used for a variety of approved services and expenses, including:

• Tuition, fees, books, and supplies at accredited schools
  
  

• Vocational counseling
  
  

• Licensing or certification exam fees
  
  

• Computers (up to $1,000 of the voucher)
  
  

• Miscellaneous expenses (up to $500 for items like uniforms or tools)
  
  

• Transportation costs (up to $500)
  
  

The voucher must be used within two years of being issued or five years from the date of injury—whichever comes later.

How to Get Your SJDB Voucher

Once your injury has reached maximum medical improvement (MMI) and it’s determined that you have a permanent partial disability, your employer or claims administrator will review whether they can offer appropriate work. If they cannot, they must issue the voucher.

If you're unsure about your eligibility or haven't received a voucher you believe you're entitled to, you can request assistance through the Division of Workers’ Compensation (DWC) or seek advice from a workers' compensation attorney.

SJDB is more than just a voucher—it’s a bridge to new employment opportunities after a life-changing injury. Whether you're exploring a new career path or building on existing skills, this benefit helps ensure that your injury doesn't define your future.

Death Benefits

When a worker tragically dies as a result of a job-related injury or illness, California’s workers’ compensation system provides death benefits to support their surviving dependents. These benefits are intended to help relieve the financial burden that often follows the unexpected loss of a loved one.

Who Is Eligible?

Death benefits are paid to the worker’s total and/or partial dependents—typically a surviving spouse, children, or other family members who relied on the worker’s income. The law assumes that certain individuals, such as minor children or a totally dependent spouse without income, are fully dependent. Other dependents may need to prove partial or total dependence at the time of the injury or illness.

Benefit Amounts (as of 2025)

The total amount of death benefits varies depending on the number of dependents:

• One total dependent: $250,000
  
  

• Two total dependents: $290,000
  
  

• Three or more total dependents: $320,000
  
  

If there are only partial dependents, the benefit amount is reduced accordingly, not to exceed the total maximum for the number of dependents.

These benefits are typically paid in weekly installments at the temporary disability rate the deceased worker would have received, subject to minimum and maximum limits.

Ongoing Support for Minors

If a deceased worker leaves behind dependent minors, payments may continue until each child turns 18 years old (or longer if the child is disabled and unable to earn a living). In some cases, this extended support can make a significant difference in a family’s ability to maintain stability after a loss.

Burial Expenses

In addition to wage replacement, the employer or insurer is required to cover burial expenses of up to $10,000 for injuries resulting in death on or after January 1, 2013.

Losing a family member is devastating, and the emotional toll is often compounded by financial stress. California’s death benefits offer a critical safety net for families, ensuring some degree of security during an incredibly difficult time. If you believe you may be eligible or have questions about your rights, contacting the Division of Workers’ Compensation or a qualified attorney can help you navigate the process with confidence.

Conclusion

Understanding how workers’ compensation benefits are calculated in California can make a significant difference in protecting your rights after a workplace injury or loss. Whether you’re recovering from a temporary setback, facing a permanent disability, or supporting a loved one through their recovery—or their passing—these benefits are in place to offer financial stability and access to essential services. Staying informed about how each benefit works, especially with the updated rates and rules for 2025, ensures you can advocate for yourself or your family during a challenging time.

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Cole, Fisher, Cole, O’Keefe + Mahoney is Central California’s leading workers’ compensation and social security disability law firm. With over 30 years of successful experience, we are committed to securing maximum benefits for our clients in the Fresno, California area. Schedule a free consultation today.