Proving Car Accident Lost Wages When Self-Employed (2025)

Who Counts as “Self-Employed”?

Depending on your employment situation, you may be unsure of whether you are classified as a self-employed person or not. If you operate a business as a sole proprietor and track your profits and losses yourself, you’re classified as self-employed.

If you’re an independent contractor (meaning you perform work for clients but are not an employee), you are also classified as self-employed. Your tax forms can also help you determine employment status:

• Employees receive a W-2 tax form
• Independent contractors receive a 1099 form

If you are someone who is an employee at one business but also has a side gig as a freelancer or independent contractor, don’t forget to factor in your lost income from your side job when filing an injury claim.

For example, if you work in an office during the week but regularly drive for a rideshare company on weekends, you would want to make sure you’re compensated for the loss of both types of income.

How to Calculate Lost Wages for Self-Employed Individuals

Understandably, many people are curious about the average settlement for car accident victims once they’ve suffered an injury in an accident. However, a better way to get an idea of what you may be able to recover is to take a closer look at your specific claim.

Exactly how you calculate lost wages depends on the nature of your business. If you’re an independent contractor who is paid hourly, you may just need to compare the hours you worked before the injury with the hours you worked after.

However, for many self-employed people, calculating lost income is more complex than that. Here are some factors to take into account:

Financial Records

Evidence is important in personal injury cases, especially when it comes to documenting compensation you’re owed for a car accident injury. Before making your calculations, gather as many of these as you can:

• Your profit and loss statements or your 1099 forms
• Communication with clients about projects and rates
• Your tax returns
• Records of any canceled contracts or missed business opportunities

While estimates of lost income are a fine place to start, remember that the insurance company will want evidence to back up your claims.

Average Income

If you’re like many self-employed people, there isn't an exact amount you can count on making every month. Calculating a daily or weekly average income pre-injury and post-injury can help you estimate how much income you’ve lost.

Lost Contracts

In some cases, your accident might cause you to lose contract opportunities. For example, imagine you build fences, and a client offers you a $10,000 month-long contract.

If you can’t accept because of your injury, you should document this communication with the client and include the missed $10,000 contract with the rest of your lost income.

Fluctuating Income

If your income varies by season, you should be able to point to previous years to illustrate how much you’d ordinarily make in a particular season.

How to Prove Lost Wages When Self-Employed

Calculating the wages you’ve lost due to a personal injury is one thing. But proving that loss of income to your insurance company is often much harder than it sounds. Insurance companies will look for any perceived weakness in your car accident claim and use it against you.

The best way to minimize the risk of that happening is to provide proof to back up your calculations — and the more official, the better.

For example, if you have a small e-commerce business and also sell items at junk sales, you might offer to show the insurance company your bank statements for the year before and the year after your accident.

That’s a reasonable offer, but your insurer might accuse you of continuing to make the same profits and hiding them in another account. In this instance, showing your tax returns may be more convincing.

However, each case (and insurance company) is different. One of the best ways to prove your lost income is to gather as much documentation as you can and give it to your attorney. Your lawyer will likely be able to convincingly argue your case to the insurer — or to a court if needed.

Do You Need an Attorney?

There’s no law requiring you to retain a lawyer when filing a car accident lawsuit or insurance claim. However, in virtually every case, working with an attorney will be helpful.

This is especially true when you’re self-employed. Insurance companies are famous for prioritizing their bottom line over their customers, and even if you’ve documented your loss of income well, your insurer might find ways to keep delaying or denying your claim.

One of the main benefits of working with a personal injury lawyer is that these lawyers deal with insurance companies almost every day. An experienced personal injury attorney has likely recovered compensation for people in very similar situations to yours — and they can use that experience when dealing with your insurance company.

ConsumerShield Is Here to Help

Want to work with an attorney but aren’t sure where to start? No need to worry — that’s why we’re here! At ConsumerShield, we aim to empower people like you by offering educational materials and matching them with qualified local attorneys.

Ready to get started? Fill out our contact form for a free case review!