When you’re already dealing with a workplace injury in California, the last thing you need is more confusion. Yet, understanding how workers’ comp payments work can be the difference between financial relief and added frustration.
Many injured workers ask themselves:
👉 How will I get paid while I’m out of work?
👉 What happens if my injury leaves me with permanent limitations?
👉 Which type of settlement payment is better for me?
👉 How much will my check be, and for how long?
This guide breaks down the main types of workers’ comp payments in California, explaining how they’re calculated, how long they last, and what choices you might face when it’s time to settle your case.
1. Temporary Disability: Your paycheck replacement while you recover
If your doctor says you can’t return to work while you heal, you may qualify for Temporary Disability (TD) benefits.
How it’s calculated: TD usually equals two-thirds (67%) of your gross average weekly wages before your injury.
Why two-thirds? Because it’s meant to mirror what you’d normally take home after taxes.
Important limits: California sets yearly minimums and maximums. For 2025, the max TD rate is around $1,700 per week.
Key detail: You can receive up to 104 weeks of TD benefits within the first 5 years after your injury. Certain severe injuries (like amputations or hepatitis) extend that limit to 240 weeks.
2. Permanent Disability: When your injury leaves lasting effects
Some injuries don’t fully heal. In those cases, you may be eligible for Permanent Disability (PD) benefits.
PD isn’t about replacing lost wages; it compensates you for long-term functional limitations caused by your injury.
Your case is assigned a disability percentage (e.g., 15%), which translates into weekly payments.
Since 2014, the maximum PD rate has been stuck at $290 per week, with no adjustments for inflation.
⚠️ The reality for many workers: Your disability rating may feel too low compared to the real impact the injury has on your job and future earnings.
3. Are workers’ comp payments taxable?
Good news: Workers’ comp benefits in California are not taxable.
You don’t pay federal or state income tax.
You don’t pay Social Security, Medicare, or other deductions.
Exception: Benefits can be garnished for child support debts, which is common. If that applies to you, your attorney needs to know right away.
4. Settlements: Lump sum vs. structured payments
Eventually, your case may reach settlement. Here are the two main types:
Compromise & Release (C&R): You get a lump sum check and close your case. No future medical is covered, but you walk away with full control of your money.
Stipulated Award: Payments are spread out in weekly checks based on your disability rating, plus ongoing medical coverage.
👉 Most injured workers prefer a C&R settlement for the financial certainty and independence, though it often means negotiating for less than the “full” value of the case.
5. Other payments you may not know about
Beyond disability and settlements, you may also qualify for:
Mileage reimbursement: Get paid back for travel to medical appointments, based on IRS mileage rates.
Supplemental Job Displacement Benefit (SJDB): A voucher to cover job training or education if you can’t return to your old job.
FAQ: Workers’ Comp Payments in California
1. How will I get paid while I can’t work?
Through Temporary Disability (TD) benefits. These checks cover about two-thirds of your gross wages until your doctor clears you to return to work or you hit the legal limits.
2. What happens if my injury leaves permanent limitations?
You may qualify for Permanent Disability (PD) benefits. These payments compensate you for lasting limitations and are based on a disability percentage assigned to your case.
3. Which type of payment is better when I settle my case?
It depends on your situation. A Compromise & Release gives you a lump sum but closes your medical care. A Stipulated Award gives you weekly checks and keeps medical treatment open but ties you to the insurance company longer.
4. How much will my check be, and for how long?
TD checks usually last up to 104 weeks (or 240 weeks for severe injuries), calculated at two-thirds of your weekly gross wages. PD checks depend on your disability rating and are capped at $290/week.
Final Thoughts
Navigating California workers’ comp payments is overwhelming, especially when you’re already dealing with the stress of an injury. Between temporary benefits, permanent disability, settlements, and reimbursements, the system is full of details that can impact your future.
You don’t have to figure it out on your own.
👉 Visit PacificWorkers.com or call (800) 606-6999 for a free consultation. Our team will help you understand your payments, protect your rights, and make sure you get the benefits you deserve.
About the Author
Bilal Kassem President and Co-founder
Bilal Kassem is the co-founder of Pacific Workers and a nominee for Applicant Attorney of the Year. With a deep-rooted passion for helping injured workers, Bilal leads with empathy and empowers his team to deliver world-class service from the very first interaction.
With years of experience handling complex cases involving wage replacement, disability ratings, and settlements, Bilal has become a trusted voice in explaining the nuances of California workers’ comp payments. His work has helped thousands of injured workers better understand their rights, secure fair compensation, and navigate a system that often feels overwhelming.