How is the amount of temporary disability benefits calculated?

The amount of temporary disability benefits is typically calculated as 66 2/3% of the individual’s actual gross income. This percentage is designed to provide a significant portion of the worker's earnings while they are unable to work due to a temporary disability. The rationale behind this calculation is to balance support for the employee with the costs associated for employers and insurance providers.

By basing the benefit on actual gross income, the system ensures that those who earn higher wages receive a benefit amount that reflects their preceding earnings, which helps maintain their standard of living during the time they are unable to work. This approach generally aligns with the principles of wage-loss compensation systems, where the intent is to replace a substantial, yet manageable, portion of lost income due to injury or illness.

Other calculations, such as a fixed percentage like 50% or 75% of last salary or using previous year’s earnings, do not typically provide as accurate a reflection of the disabled worker's financial situation and may not adequately support individuals with higher incomes during their recovery period.