Are bonuses included in workers’ compensation calculations?
Workers Compensation - July 31, 2025
Are bonuses included in workers’ compensation calculations? In most situations, they should be.
Trying to figure out what is happening in your workers’ compensation case can be frustrating. Employers may be resistant to accepting your injury claim, or their insurance provider may give pushback on your benefits, including reimbursement for wages and bonuses. When this happens, you need the support of a Joliet workers’ compensation lawyer.
How are workers’ compensation wage benefits calculated?
While you may receive medical benefits or others associated with rehabilitation and job skills, if you are wondering about pay, you’re probably pursuing a disability claim. Workers’ compensation offers two types of wage benefits. These include complete and partial temporary disability. The Illinois Workers’ Compensation Handbook explained that the payments are calculated based on the average weekly wage (AWW) of the previous 52 weeks.
Your payments are subject to minimum and maximum limits, but in most cases, you will receive about 66% of the calculated AWW. This should be based on your gross wages, which include any commission or bonuses on your pay stubs during that period. Therefore, if you received bonuses during that time, they are often eligible for inclusion.
The type of bonus you receive affects whether it is part of your workers’ compensation calculation
When you receive a bonus at work, it is typically categorized in one of two ways: as either a discretionary or nondiscretionary bonus. When it comes to your workers’ compensation calculations, the type of bonus matters.
Discretionary
According to the Department of Labor, a discretionary bonus is one that is completely determined by the employer up to or near the end of the period corresponding to the bonus. This may include referral bonuses, those given to celebrate a particularly challenging period, or a bonus for the employee of the month. These are separate from any contractual obligation.
Non-Discretionary
A non-discretionary bonus is inherent to your pay structure or otherwise promised or contracted. This may include quarterly performance bonuses or commissions from sales or meeting performance metrics. A non-discretionary bonus may also include incentives that are announced in advance to motivate employees to meet a goal or perform a certain task.
Wage benefits are among the most contested components of a workers’ compensation claim
Wage benefits are often the most contested part of a workers’ compensation claim. While these claims are designed to be no-fault, meaning you’re not required to prove negligence, employers and insurers might still push back.
Some employers will try to calculate your wage loss using only your hourly rate, excluding overtime, commissions, or bonuses. But those earnings are typically subject to workers’ compensation if they’re part of your gross wages.
Illinois employers are also subject to workers’ comp premiums, which may influence how hard they fight to lower your payout. That’s why we recommend keeping detailed pay records, including your stubs from the year before your injury.
Horwitz, Horwitz & Associates will advocate for the compensation you deserve
Managing your workers’ compensation claim can be challenging, especially if you are afraid that too much pushback can negatively impact your job. Most employers are subject to workers’ comp premiums according to Illinois law.
If your employer or their insurance is illegally denying your claim, or they are refusing to consider all eligible wages in their calculations, you can contact Horwitz, Horwitz & Associates online or by phone at (800) 985-1819 for a free case consultation
