Lost Wages and Earning Capacity in Georgia Car Accident Cases
On this page
Georgia treats lost wages and lost earning capacity as two different items. Lost wages are pay you already missed because of the injury. Lost earning capacity is the reduction in what you can earn in the future, and it requires proof of a permanent or total physical disability and evidence of what you could earn before and after the injury. Future losses can be reduced to present value, at 5 percent or another rate the jury finds appropriate.
Wages and earning capacity compared
| Lost wages | Lost earning capacity | |
|---|---|---|
| Period | From the crash to trial | The rest of the working life |
| What it measures | Pay actually missed | The diminished ability to earn |
| Threshold | Time missed because of the injury | A permanent or total physical disability |
| Proof | Pay records, employer statements, tax returns | Medical proof of the lasting limitation, evidence of earning ability before and after, and, where needed, vocational and economic testimony |
Senate Bill 68’s definition of economic damages lists them separately: “loss of wages; loss of income; loss of earning capacity” (O.C.G.A. § 9-10-184(a)(1)).
The rules for earning capacity
In Jones v. O’Day (2010), the Court of Appeals restated the Georgia rules:
- Earning capacity is “a separate element of damages recovery of which physical injury to the plaintiff resulting in a permanent or total physical disability is the essential element.”
- It requires “some evidence upon which a jury can base with reasonable certainty a finding as to amount of such damages.”
- Actual earnings are not required, but there must be “some evidence, either direct or circumstantial, tending to show what the plaintiff was capable of earning both before and after the injury.”
- “It is not permissible to allow a recovery of lost earning capacity based upon an occupation in which the plaintiff had never engaged or had not demonstrated the skill and capacity to successfully pursue.”
A person who returns to the same job at the same pay can still have a capacity claim if the injury closes off future work the person was capable of doing.
Building the number
For example, imagine a 47-year-old warehouse supervisor who could earn $62,000 a year before the injury and $42,000 after, a $20,000 gap, for 15 more working years. Undiscounted, the loss is $300,000. Under O.C.G.A. § 51-12-13(a), the jury may reduce future damages to present value using “a discount rate of 5 percent or any other discount rate as the trier of fact may deem appropriate”. At 5 percent, with each year’s loss counted at the end of that year, the stream is worth about $207,593 today. The figures are illustrative only and leave out raises, benefits, and taxes; a different rate or working-life estimate changes the result.
Records that prove each item
- Lost wages: pay stubs before and after, an employer letter confirming dates missed and the rate of pay, and tax returns; for the self-employed, business records and returns.
- Earning capacity: a physician’s opinion on the permanent restrictions, a vocational assessment of jobs still available, and an economist’s present-value calculation if the amounts are large.
Lost wages that compensate a physical injury are treated for federal income tax purposes as part of that recovery; see are car accident settlements taxable in Georgia. The other categories of damages are mapped in types of damages in Georgia car accident claims.
Sources
- Jones v. O’Day, 303 Ga. App. 159 (2010)
- O.C.G.A. § 51-12-13 (text of the Official Code of Georgia Annotated, November 2022 release); § 9-10-184 (Senate Bill 68 (2025), as passed, § 1).
This page describes Georgia law as of October 2026 for general information. It is not legal advice and does not create an attorney-client relationship.