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How to Calculate Worker's Compensation in Payroll in California


by Laurie Reeves Google

1. Determine the employee's regular weekly wage. If he makes $52,000 per year, that equates to $1,000 per week. One way to calculate his hourly wage, if you only know his annual salary, is to divide his annual wage by the number of regular work hours per year--2,080 hours (52 times 40). To obtain the weekly wage, divide his annual salary by 52.

2. Calculate the maximum benefit he is able to receive as a workers' compensation payment. Use his weekly wage to determine his workers' compensation temporary disability benefit. Formulate two-thirds of his weekly salary to obtain the result. For instance, for the employee who makes $1,000 per week, use the formula $1,000 multiplied by 2/3 to equal $666.66 per week.

3. Subtract the workers' compensation weekly payment from his weekly wage. The formula is $1,000 minus $666.66, which results in $333.34. If he works for

an employer who is self-insured and provides the Disability with Leave Pay program, the employee would receive his regular $1,000 per week, $666.66 from workers' compensation and $333.34 from the disability with leave pay program for his gross wage while injured.

4. Figure the employee's workers' compensation paycheck if a Disability with Leave Pay program and the payroll occurs every two weeks. In this scenario, the employee would receive gross wages of $2,000 every two weeks, $1,333.32 of which is earmarked from the workers' compensation portion of his payroll and the balance of $666.68 would come form the Disability with Leave Pay program.

5. Calculate the employee's salary if he does not work for a self-insured public entity or company that provides a Disability with Leave Pay program. For the employee who makes $1,000 per week, he would receive $666.66 per week as his temporary disability payment, without any taxes withheld, following the formula provided in Step 2.


Category: Paycheck

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