Suffering a workplace injury can turn your financial life upside down. Many injured workers in Florida find themselves asking the same urgent questions: How will this affect my paycheck? Do I have to pay taxes on workers’ comp? Will I get paid weekly, bi-weekly, or at all?
At Sternberg | Forsythe, P.A., we have helped countless injured workers across Florida navigate these stressful financial uncertainties. As experienced workers’ compensation lawyers in Florida, we understand how much rides on your ability to maintain your income after a work injury.
Here, you can learn how workers’ compensation impacts your paycheck and tax situation, so you are not left in the dark.
What Happens to Your Paycheck After a Work Injury?
If you are injured on the job in Florida and your injury keeps you from working, you may be eligible to receive temporary disability benefits through workers’ compensation. These benefits are meant to replace a portion of your paycheck, but they will not match your full salary.
Here’s how the system generally works:
- Temporary Total Disability (TTD): If you cannot work at all due to your injury, you may receive 66 2/3% of your average weekly wage, up to the state maximum.
- Temporary Partial Disability (TPD): If you can return to work but earn less due to your injury, you may receive benefits to make up part of the difference in pay.
The Florida Department of Financial Services sets limits on how much you can receive. As of 2024, the maximum weekly benefit is $1,260, but this figure is adjusted annually.
How Is Your Average Weekly Wage Calculated?
Your average weekly wage (AWW) is calculated using your wages from the 13 weeks before your injury, not including the week you were injured. This includes:
- Overtime
- Bonuses
- Second jobs (in some cases)
- Per diem or stipends
If you worked irregular hours or recently started your job, the calculation may be adjusted. This is where working with a workers’ compensation lawyer in Florida becomes crucial—we can ensure your AWW is calculated reasonably and includes all eligible income.
Are Workers’ Comp Benefits Taxable?
One of the most common questions we hear is: Will I have to pay taxes on my workers’ comp benefits?
The good news is that, in most cases, workers’ compensation benefits are not taxable under state or federal law.
According to the IRS and Florida law:
- Workers’ comp benefits are tax-free if paid under a state-mandated workers’ compensation act (like Florida’s).
- This includes both temporary and permanent disability benefits.
However, there are exceptions, especially if you are receiving Social Security Disability Insurance (SSDI) at the same time. In those situations, a portion of your SSDI may be taxable if your total income exceeds a certain threshold. That is why it is so important to speak with a Florida work injury attorney if you are receiving multiple benefit streams.
Can Workers’ Comp Affect Your Paycheck Deductions?
Yes. When you begin receiving workers’ compensation, several things can change regarding deductions:
- No payroll deductions: Since you are no longer receiving wages from your employer, you will not see deductions for Social Security, Medicare, or retirement contributions.
- Health insurance: If your employer typically deducts health premiums from your paycheck, you may be responsible for paying them out-of-pocket to keep your coverage active.
- Other benefits: Life insurance, union dues, and other automatic paycheck deductions will also stop unless you make special arrangements.
If you are unsure how your benefits will be affected, our workers’ comp attorneys in Florida can help clarify what to expect and how to stay protected.
What If You Work a Second Job?
Many Florida workers hold second jobs. Unfortunately, if you are injured at your primary job, you may not be able to work in either position, resulting in a significant loss of income. The good news: if your employer and insurance carrier are aware of your second job, it may be included in the AWW calculation.
If your second job income is not included, you could be short-changed on your weekly benefits. We can step in as your injury lawyer in Florida to make sure all sources of income are counted when calculating your AWW.
Can You Still Get a Paycheck from Your Employer?
Usually, once your workers’ comp benefits kick in, your regular paycheck from your employer stops. However, you may still get paid by your employer under certain conditions:
- You use accrued sick leave or PTO: Some workers use their paid time off while waiting for workers’ comp benefits to begin.
- Your employer pays supplemental wages: In rare cases, an employer may voluntarily make up the difference between your workers’ comp checks and your full salary.
- You return to work with restrictions: If you are doing light duty or part-time work, your employer may pay you directly for those hours.
We recommend keeping detailed records of all income and correspondence. If anything looks incorrect, search for workers’ comp lawyers near me and get professional help. We are always just a phone call away.
What About Taxes Next Year?
Although workers’ compensation benefits are not taxable, you may still need to file a tax return, especially if:
- You worked part of the year before your injury
- You received a lump sum settlement
- You had other taxable income, such as from a spouse
You should not receive a W-2 for workers’ comp payments, but if you do, this could indicate a reporting mistake that should be corrected. As your Florida work injury attorney, we can help ensure your settlement or ongoing benefits are reported accurately.
How a Settlement Affects Your Income and Taxes
Many injured workers eventually receive a lump sum settlement. This can change your financial picture in several ways:
- The settlement itself is generally not taxable
- Interest payments or unrelated compensation (like punitive damages) may be taxable
- If you are on public benefits, the lump sum may impact your eligibility
Before agreeing to any settlement, consult with a workers’ comp attorney in Florida. We will review the settlement structure, potential tax implications, and whether it protects your long-term interests.
Why Working with a Lawyer Makes a Big Difference
The workers’ compensation system in Florida is complex. While it may seem straightforward at first, simply submitting a claim and waiting for checks, the reality is rarely that smooth. Insurance companies often delay, reduce, or deny payments for reasons that do not always make sense.
At Sternberg | Forsythe, P.A., we fight to ensure your weekly benefits reflect your actual income, that your rights are protected, and that your paycheck and taxes are handled correctly. Whether you are just starting a claim, facing a denial, or wondering what a settlement would mean for your finances, we are here to help.
If you’re searching online for a workers’ comp lawyer near you, your search ends here. We serve clients throughout Florida and offer personalized, results-driven representation when it matters most.
Let Us Protect Your Paycheck and Your Future
When you are injured at work, your income and stability are on the line. At Sternberg | Forsythe, P.A., we understand that your paycheck is more than just a number—it is your rent, your groceries, your peace of mind. That is why we fight hard to protect every dollar you deserve.
If you are struggling with workers’ compensation payments, tax concerns, or benefit delays, do not wait. Contact us today to schedule a free consultation with an experienced workers’ compensation lawyer in Florida.