Average weekly wage, commonly abbreviated as AWW, is one of the most important financial calculations in an Illinois workers’ compensation claim. It affects temporary disability payments, permanent partial disability benefits, wage-differential benefits, permanent total disability compensation, and death benefits.
An understated AWW can reduce every weekly payment and materially lower the value of a settlement or award. An employee whose wage is understated by $150 per week, for example, may receive less temporary disability during treatment and a smaller permanent disability award after reaching maximum medical improvement.
Illinois does not use one simplified calculation in every claim. Section 10 of the Illinois Workers’ Compensation Act establishes different methods based on how long the employee worked, whether the worker missed substantial time during the preceding year, whether the employment was unusually short or casual, and whether earnings from concurrent jobs qualify for inclusion.
AWW represents the employee’s average includable earnings before the work injury. It is generally calculated from gross earnings before taxes and payroll deductions rather than the employee’s net take-home pay.
For an employee who worked throughout the preceding year, Section 10 generally uses actual earnings from the 52 weeks ending with the last full pay period immediately before the injury. Statutory overtime and bonuses are excluded before the appropriate divisor is applied.
The calculation is intended to approximate what the employee ordinarily earned before becoming injured. It should not automatically be based on one unusually high paycheck, the employee’s post-injury earnings, or a simple hourly rate multiplied by 40 when the worker regularly earned a different amount.
Most Illinois workers’ compensation cash benefits are calculated as a percentage of AWW.
Temporary total disability benefits are generally 66⅔ percent of AWW, subject to the statutory minimum and maximum applicable to the accident date. Ordinary scheduled and person-as-a-whole permanent partial disability benefits are generally based on 60 percent of AWW, also subject to statutory limits.
AWW can also affect:
The Illinois statewide average weekly wage, or SAWW, is different from an individual employee’s AWW. The state uses the SAWW to establish certain benefit minimums and maximums, while the employee’s own AWW is calculated from that worker’s earnings.
The Illinois Supreme Court has recognized four methods under Section 10. The correct method depends on the employee’s actual work history.
When the employee worked throughout the 52 weeks before the accident and did not lose five or more calendar days, the general calculation is:
Includable earnings during the 52-week period ÷ 52 = AWW
Assume an employee earned $52,000 in includable gross wages during the relevant period.
$52,000 ÷ 52 = $1,000 AWW
The employee’s initial TTD rate would generally be:
$1,000 × 66⅔ percent = approximately $666.67 per week
The actual payment remains subject to the minimum and maximum benefit rates applicable to the accident date.
The relevant 52-week period ends with the employee’s last complete pay period immediately before the injury. It does not necessarily run from January 1 through December 31.
When an employee lost five or more calendar days during the 52-week period, whether those days occurred consecutively or separately, Section 10 requires adjustment of the divisor.
The employee’s remaining earnings are divided by the number of weeks and parts of weeks remaining after the lost time is deducted.
Assume the employee lost 14 calendar days and earned $50,000 during the remaining 50 weeks.
$50,000 ÷ 50 = $1,000 AWW
Dividing those earnings by 52 would produce an artificially low AWW of approximately $961.54. The lost-time adjustment prevents unpaid or unworked periods from automatically reducing the worker’s normal earning level.
The reason for the missed time can become important. Payroll records should identify unpaid leave, layoffs, illness, personal absences, strikes, seasonal shutdowns, and other periods when wages were not earned.
When the employment relationship lasted less than 52 weeks before the accident, actual earnings are generally divided by the number of weeks and parts of weeks during which the employee earned wages.
Assume a recently hired employee worked 20 weeks and earned $20,000 before the accident.
$20,000 ÷ 20 = $1,000 AWW
The insurer should not ordinarily divide the $20,000 by 52, which would reduce the AWW to approximately $384.62.
This method can apply to recently hired employees, seasonal workers, temporary employees, and workers who changed employers during the preceding year. The calculation concerns earnings from the employment in which the employee was working when injured, subject to the concurrent-employment rule.
The precise number of weeks and partial weeks worked must be established. Merely counting paychecks may be inaccurate when pay periods overlap, include partial weeks, or reflect periods without work.
Sometimes the employee worked for such a short period, or under such casual terms, that the worker’s own limited earnings do not provide a reliable average.
In that situation, Section 10 directs consideration of what a person in the same grade, performing the same work for the same employer and working the same number of hours, earned or would have earned during the preceding 52 weeks.
This method may become relevant when a worker is injured within days of beginning employment, has highly irregular work, or lacks enough personal wage history to produce a meaningful calculation.
Evidence may include payroll records for comparable employees, wage schedules, union agreements, rate sheets, job classifications, anticipated hours, and testimony from payroll or management personnel.
The comparison should involve the same employer when the statutory requirements can be satisfied. General industry wage data does not automatically replace evidence concerning a comparable employee working for that employer.
AWW generally uses gross earnings before income-tax withholding, Social Security deductions, insurance premiums, retirement contributions, and other payroll deductions.
The IWCC describes the calculation as generally based on gross, pretax wages during the 52 weeks before the injury or occupational exposure.
Using net pay can substantially understate the wage. A pay stub showing $1,000 in gross earnings and $760 in take-home pay ordinarily begins with the $1,000 figure, subject to the rules concerning overtime, bonuses, and other compensation.
Section 10 states that overtime is excluded, but the word does not necessarily include every hour or payment that an employer labels as overtime.
Illinois courts generally treat voluntary, irregular hours beyond the employee’s normal schedule as excludable overtime. However, hours the employee was required to work as a condition of employment, or a set number of additional hours worked consistently each week, may be treated as part of regular earnings.
A recent 2026 Illinois appellate decision affirmed exclusion where the worker did not have a set number of overtime hours and the evidence did not establish that additional hours were a mandatory condition of employment.
Relevant evidence can include:
The employee should not simply add every overtime payment to the wage calculation. The employer should likewise not exclude consistently required hours merely because its payroll system assigns an overtime rate.
The analysis concerns whether the additional hours constitute statutory overtime, not merely whether the worker received time-and-a-half compensation.
When additional hours were voluntary and irregular, the earnings associated with those hours may be excluded. When the employee was regularly required to work a set schedule exceeding 40 hours, those hours may qualify as regular employment even though federal or state wage law required premium pay.
The proper calculation is fact-specific. Wage statements alone may not establish whether the hours were mandatory or optional.
Section 10 expressly excludes bonuses from the general AWW calculation.
Disputes may arise over whether a payment was truly a bonus or represented ordinary earned compensation under another name. A discretionary performance award may be treated differently from commissions earned directly through completed sales or production.
The payroll description does not necessarily resolve the issue. The employment agreement, payment formula, worker’s duties, regularity of payment, and whether the amount was earned through completed work may need to be examined.
Actual earnings are not necessarily limited to an hourly wage or salary.
Earned commissions may qualify when they represent compensation for the employee’s work rather than an excluded bonus. Documented tips can also qualify as consideration received for work. Illinois decisions have recognized that AWW may include items of value received as compensation, including properly supported tip income.
The employee has the burden of proving the claimed wage. Useful evidence may include commission statements, sales records, tax returns, employer reports, point-of-sale records, tip declarations, bank deposits, and credible testimony.
Unsupported estimates can lead to a lower calculation.
Wages from concurrent employment may be included when the employee was working for two or more employers and the respondent employer knew about the other employment before the injury. Section 10 then treats the qualifying wages as though they were earned from the employer liable for compensation.
Assume an employee earned:
If the first employer knew about the concurrent job before the accident, the potential combined AWW could be $1,000.
The knowledge requirement is critical. Evidence might include scheduling discussions, employment applications, emails, tax withholding documents, requests to accommodate the second job, or testimony from supervisors.
Self-employment income does not automatically qualify as wages from a concurrent employer. Illinois courts have rejected inclusion of business profits where the evidence did not establish qualifying employee earnings from another employer.
Seasonal construction workers, union tradespeople, substitute employees, agricultural workers, and others with irregular schedules can present difficult calculations.
The insurer may attempt to divide total earnings by 52 even when the employee did not work throughout the year. The worker may argue that layoffs, weather shutdowns, or other lost periods should be removed from the divisor.
Section 10 focuses on the employee’s actual earnings and time worked. The evidence must establish the weeks and partial weeks during which wages were earned and the days properly deducted.
A union wage rate alone does not necessarily establish AWW. The calculation may also require evidence of actual hours, seasonal patterns, mandatory overtime, employer assignments, and employment duration.
For a salaried employee who worked the complete 52-week period, the basic calculation often begins with the includable annual salary divided by 52.
A salary of $78,000 would ordinarily produce:
$78,000 ÷ 52 = $1,500 AWW
Adjustments may still be necessary for excluded bonuses, a midyear raise, unpaid leave, commissions, concurrent employment, or a period of employment shorter than 52 weeks.
The employee’s wage should be based on earnings during the statutory period, not automatically on the salary in effect on the injury date when that salary was received for only part of the year.
The ordinary calculation uses actual earnings during the relevant pre-injury period. A recent raise may therefore be reflected only in the weeks during which the higher rate was actually paid.
The comparable-employee method may produce a different analysis when the worker had such short or casual employment that the ordinary methods are impractical.
A future raise generally does not change the original AWW calculation. However, current earnings in the former occupation may become relevant to a later wage-differential analysis.
Once AWW is established, it is applied differently depending on the benefit.
TTD is generally:
AWW × 66⅔ percent
An AWW of $1,200 would produce a base TTD rate of $800, subject to statutory minimums and maximums.
Ordinary scheduled and person-as-a-whole PPD generally use:
AWW × 60 percent
An AWW of $1,200 would produce a base PPD rate of $720, subject to the applicable maximum and minimum.
For post-June 28, 2011 injuries, TPD generally equals two-thirds of the difference between the amount the employee would have earned in the pre-injury position and the gross amount earned in temporary light-duty work.
A wage-differential benefit generally equals two-thirds of the difference between the amount the employee would be able to earn in full performance of the former occupation and the amount earned or earnable in suitable post-injury employment.
The wage-differential calculation can involve wage increases in the former occupation and should not always be treated as a simple comparison between the original AWW and current earnings.
AWW disputes frequently arise because the insurer:
Employees should review the wage statement and benefit rate rather than assuming the insurance carrier’s calculation is accurate.
The employee bears the burden of proving the claimed AWW. The Commission’s wage determination is a factual issue based on the evidence presented.
Important evidence can include pay stubs, payroll summaries, W-2 forms, tax returns, time cards, schedules, union agreements, employment contracts, commission statements, tip records, and testimony explaining mandatory overtime.
For concurrent employment, preserve proof that the respondent employer knew about the additional job before the injury.
When the comparable-employee method may apply, records should identify a worker in the same grade performing the same work for the same employer and working the same number of hours.
No. AWW generally begins with gross pretax earnings rather than the employee’s net paycheck.
No. A different divisor applies when the employee lost five or more calendar days, worked less than 52 weeks, or had employment too short or casual for the ordinary methods.
Section 10 expressly excludes bonuses. A dispute may arise when the employer labels ordinary earned compensation as a bonus.
Voluntary and irregular overtime is generally excluded. Required hours or a consistent set schedule may qualify as regular earnings even when the employer labels the hours overtime.
Properly supported tip income may be included as compensation received for work. The employee must provide credible evidence of the amount.
Earned commissions may qualify as actual earnings, depending on the compensation agreement and evidence. Discretionary bonuses remain excluded.
Yes, when the worker had concurrent employers and the respondent employer knew about the additional employment before the injury.
The comparable-employee method may apply if the employment was too short to make the employee’s own limited earnings a practical measure. Otherwise, earnings may be divided by the weeks and partial weeks actually worked.
The regular calculation uses actual earnings during the statutory period. The higher rate ordinarily affects only the period during which it was paid, unless another Section 10 method applies.
Frequency is relevant but may not be enough by itself. The evidence should establish whether the hours were required, consistently scheduled, or optional.
The carrier may revise its calculation after receiving additional wage evidence. When the parties disagree, an IWCC arbitrator can determine the proper AWW.
The insurer may have excluded overtime or bonuses, used an incorrect divisor, applied a statutory maximum, or relied on incomplete wage records. The written calculation should be reviewed.
Yes. AWW influences temporary disability, PPD, wage-differential, PTD, and other benefit calculations. An understated AWW can materially reduce the settlement value.
Average weekly wage disputes can involve unpaid periods, short employment, seasonal layoffs, mandatory overtime, commissions, tips, concurrent jobs, or incomplete payroll records. Even a modest weekly error can substantially affect the benefits paid over the life of a claim.
Robert Edens Law Office represents injured employees throughout Antioch, Waukegan, Grayslake, Lake Zurich, Woodstock, Barrington, Lake County, McHenry County, and surrounding Northern Illinois communities.
Call (847) 395-2200 or contact Robert Edens Law Office to request a consultation about an Illinois workers’ compensation wage calculation.
For a broader explanation of TTD, PPD, wage differentials, medical benefits, and settlement valuation, read Illinois Workers’ Compensation Benefits And Claim Value.
For settlement formulas, read How Illinois Workers’ Compensation Settlements Are Calculated.
This page provides general legal information and is not a guarantee of a particular wage, benefit rate, settlement amount, or case result. AWW depends on the employee’s records, work history, compensation structure, accident date, and applicable Illinois law.
The Law Offices of Robert T. Edens, Personal Injury and Workers' Compensation Law Office, have offices in Antioch, Waukegan, Grayslake, Woodstock and Barrington. We represent clients throughout the communities of Antioch, Waukegan, Grayslake, Barrington, Woodstock, Buffalo Grove, Deer Park, Gurnee, Lake Zurich, Round Lake, McHenry, Cary, Crystal Lake, Libertyville, Lincolnshire, Mundelein, Vernon Hills, Wheeling, North Chicago, Zion, Inverness, Palatine, Wauconda, Island Lake, Fox Lake, Barrington Hills, Spring Grove, Lake Bluff, Lakemoor, Long Grove, Lake Villa, Kildeer, Wadsworth, Indian Creek, Fox River Grove, Lindenhurst and other cities within Lake and McHenry Counties Illinois.
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