Enter the annual salary or earnings and the number of days lost into the calculator to estimate the loss of earnings. Use the “Days per Year Basis” setting to match your days lost (for example, calendar days or working days).
Related Calculators
- Reduced Salary Calculator
- Hours To Money Calculator
- Days To Retirement Calculator
- Real Wage Rate Calculator
- All Personal Finance Calculators
Future Loss of Earnings Formula
The following formula is used to estimate a loss of earnings from a given number of days missed.
FLE = \frac{AS}{DPY}\times DL- Where FLE is the future loss of earnings ($)
- AS is the average annual salary or earnings ($)
- DPY is the days-per-year basis used to convert annual earnings to a daily rate (for example, 365 calendar days or 260 working days)
- DL is the total number of days lost (use the same type of days as DPY)
To calculate the loss of earnings, multiply the daily earnings rate (AS divided by DPY) by the total number of days lost (DL).
What is a future loss of earnings?
Definition:
A future loss of earnings is an estimate of the earnings (or earning capacity) expected to be lost in the future due to an injury or other event that reduces the ability to work. When losses extend across multiple years, they are often projected over time and discounted to present value.
These events are commonly workplace injuries. In business contexts, similar methods are used to estimate future lost income or profits from events such as contract breaches or intellectual property infringement.
How to calculate future loss of earnings?
Example Problem:
The following example outlines the step-by-step process to calculate a future loss of earnings.
First, determine the average annual earnings. In this example, the average annual earnings is $100,000.00.
Next, determine the estimated number of days that will be lost. In this case, the event is an injury that causes a person to miss 100 working days.
Then, select a days-per-year basis that matches your definition of “days lost.” For working days, a common basis is 260 working days per year.
Finally, calculate the future loss of earnings using the formula above:
FLE = AS / DPY * DL
FLE = 100000 / 260 * 100
FLE = $38,461.54
