Quick Answer: The Core TAC LOE Formulas

TAC Loss of Earnings (LOE) is generally calculated using your PAWE (pre-accident weekly earnings) and your
current weekly earnings (what you earn after the accident, if you’re working).

Total LOE (No Work / No Earnings)

If you have not returned to work because of your transport accident injuries, TAC typically calculates a weekly LOE amount using:

• 80% of your PAWE, compared to the prescribed minimum weekly amount (and dependant allowances where relevant), and
• Capped so it does not exceed the lesser of the prescribed maximum weekly amount or 100% of your PAWE.

Partial LOE (Some Work / Reduced Earnings)

If you return to work part-time due to your injuries, TAC typically calculates partial LOE as:

• 85% of the difference between your PAWE and your current weekly earnings (CWE),
• Compared to minimum rate rules (minimum weekly amount less your CWE, with dependant allowances where relevant), and
• Capped (for example, by maximum weekly amounts and by 100% of PAWE less your CWE).

That’s the skeleton. The rest of this article fills in the practical detail — especially how PAWE is determined and why “current weekly earnings”
is not always as straightforward as it sounds.

Key Terms You Need to Know (PAWE, Total vs Partial LOE, CWE)

PAWE (Pre-Accident Weekly Earnings)

PAWE is essentially TAC’s baseline for what you earned per week before the accident. For many people (especially employees),
PAWE is based on average gross earnings over a relevant period (often 12 months, depending on your accident date and work history).

Total LOE vs Partial LOE

“Total LOE” generally means you have not returned to work at all because of accident injuries.
“Partial LOE” generally means you have returned to work in some capacity but still earn less than before.

CWE (Current Weekly Earnings)

Current weekly earnings is what you’re earning now (post-accident). If you’re back at work part-time, on suitable duties,
or in a different role, CWE becomes the number that reduces your LOE because LOE is designed to cover the shortfall.

In practice, LOE is the “math bridge” between your pre-accident earnings and your post-accident reality — with minimums, maximums,
and policy rules shaping the final figure.

Step 1: How TAC Works Out Your PAWE (Pre-Accident Weekly Earnings)

Before TAC can calculate LOE, it needs PAWE. This is where many disputes start, because PAWE depends on:

• Your accident date (because different rules can apply depending on when the accident occurred)
• Whether you were earning continuously
• Whether you had multiple employers
• Whether your income was variable (casual, overtime, bonuses)
• Whether you were self-employed

For many employees (accidents on or after 1 January 2005)

A common approach is the weekly average of your gross earnings over the 12 months immediately before the accident,
provided you were earning continuously in that period. If you were earning continuously but for less than 12 months, TAC can use the
average gross earnings over the continuous earning period.

Why gross earnings matters

“Gross” means before tax — so payslips and payroll reports are usually the cleanest evidence TAC can rely on.
If you’re in Melbourne and you’ve worked casual hospitality shifts, penalty rates, or regular overtime, your payslip history matters
because it shows the real pattern of earnings (not just your base hourly rate).

Indexing and pay rises

PAWE can be affected by pay rises, bonuses, leave loading, and periods of unpaid leave within the relevant averaging period.
This is one reason TAC often wants a full run of records rather than a small sample.

Step 2: Total LOE (If You Can’t Work at All)

If you’re not working at all because of your transport accident injuries, TAC generally assesses your LOE using a “total LOE” method.

The 80% starting point

A common calculation is 80% of PAWE. But TAC doesn’t stop there. That amount is then compared to:

• the prescribed minimum weekly amount (and allowances for dependants, if applicable), and
• it is capped so it does not exceed the lesser of the prescribed maximum weekly amount or 100% of PAWE.

What that means in normal language

TAC uses 80% as the “standard rate,” but ensures you aren’t paid below certain minimums (depending on your circumstances)
and also ensures you aren’t paid above certain maximum limits.

If you’re budgeting while you’re fully off work, this matters: the number you expect (your full wage) may not match the number TAC pays,
and the cap may come into play for higher-income earners.

Step 3: Partial LOE (If You Return to Work Part-Time)

Partial LOE is where the “gap payment” concept becomes the centre of the calculation.

The 85% gap formula

If you return to work part-time due to accident injuries, TAC commonly pays partial LOE calculated as:

Partial LOE = 85% × (PAWE ? Current Weekly Earnings)

Then TAC compares that figure to the prescribed minimum weekly amount rules (minimum weekly amount less your current weekly earnings,
plus dependant allowances where relevant). The payable amount is generally the greater of those minimum-based figures and the 85% gap figure,
subject again to caps.

Why partial LOE can feel “messy”

Because your current earnings can change week to week (especially if you’re casual, on graded hours, or doing variable shifts),
TAC can assess partial LOE on a weekly basis, sometimes requiring payslips each week.

That’s why people sometimes feel like their TAC income “moves around.” It’s not necessarily random — it’s often responding to weekly changes in CWE.

Minimums, Maximums, and the “Capped” Amounts

Minimums and maximums are where TAC calculations differ from a simple “percentage of wages” approach.

Minimum weekly amount and dependant allowances

TAC policies use prescribed minimum weekly amounts, and where a person has dependants, an allowance may apply.
In a partial LOE setting, those minimum figures are usually considered after subtracting your current weekly earnings.

Maximum weekly amount and the 100% PAWE cap

TAC also applies caps:

• For total LOE, the weekly LOE benefit generally must not exceed the lesser of the prescribed maximum weekly amount or 100% of PAWE.
• For partial LOE, caps can apply after accounting for your current weekly earnings (for example, maximum weekly amount less CWE, and 100% PAWE less CWE).

If you’re a higher-income earner in Melbourne (for example, FIFO patterns, high overtime roles, specialist roles), the maximum weekly amount can become
the hidden reason why your LOE is lower than you expect.

Why LOE Can Change Week to Week (Casuals, Overtime, Variable Wages)

Many Victorians aren’t on a neat 9–5 salary. Hospitality, construction, gig work, nursing, logistics, and trades often have:

• Variable hours week to week
• Penalty rates
• Overtime
• Allowances

When your post-accident wage varies week to week, TAC may assess your partial LOE on a weekly basis once it receives payslips.
If you can’t obtain payslips (or payroll is slow), employers may be asked to provide written confirmation of hours worked and gross wages.

Practical tip: if you’re returning to work on a graded plan, keep your own record of rostered hours and actual hours worked.
If there’s ever a mismatch between what payroll says and what happened in real life, that record helps.

Multiple Jobs, Side Hustles, and Two Employers

It’s extremely common in Melbourne to have:

• A weekday job plus a weekend job
• Part-time employment plus contracting work
• Multiple casual employers (hospitality, retail, events)

For PAWE (particularly for post-2005 accidents), TAC can consider gross earnings from all jobs when calculating your average weekly earnings,
up to the statutory maximum payable.

This is one of the most important “don’t forget it” points: if you only provide payslips from one job, you may accidentally lock your PAWE lower than it should be.
If you had two employers, provide evidence for both.

What If You’d Just Started a New Job Before the Accident?

Sometimes the averaging method doesn’t reflect reality. Example: you were earning less for most of the last 12 months,
then started a new role on a higher wage a few weeks before the accident.

TAC policies can allow PAWE to be assessed based on what you could reasonably have been expected to earn under a new employment arrangement,
with previous earnings disregarded in that scenario.

If that’s you, the evidence that matters is usually:

• The signed employment contract
• Confirmation of hours and rate
• Early payslips (even if only a few)
• Employer confirmation of the arrangement

Without those documents, TAC may default to the standard averaging method, which can significantly reduce LOE.

What If You Were Unemployed at the Date of Accident?

People sometimes assume, “If I was between jobs, I get nothing.” That’s not always the case.

TAC policies can assess PAWE in situations where a person was unemployed at the date of accident but had earnings within the 12 months before the accident,
by averaging gross earnings received over that 12-month period.

The practical issue here is proof. If you had short-term roles, multiple casual employers, or gaps, you may need to pull together:

• Payslips across multiple employers
• Income statements (MyGov / payroll summaries)
• Bank statements showing pay deposits

If you’re relying on this kind of work history approach, organisation can be the difference between quick payments and long delays.

How LOE Is Approached for Self-Employed People

Self-employed LOE can feel more complicated because your “earnings” might be:

• Wages paid to yourself through a company
• Drawings from business profits
• Variable income tied to projects or seasons
• Income mixed with business expenses

TAC has specific policy guidance on LOE assessment for self-employed claimants, and in practical terms, it usually relies on financial evidence such as:

• Tax returns
• Business activity statements (BAS)
• Profit and loss statements
• Invoices and evidence of work performed
• Accountant summaries (where helpful)

If you’re a self-employed tradie in Melbourne, one of the strongest ways to explain loss is to show:

• What you normally billed / earned pre-accident
• What you billed / earned post-accident
• Why the drop is tied to capacity (for example, lifting limits, travel limits, pain flare-ups, psychological symptoms)
• Whether you had to hire subcontractors to do work you used to do yourself

Self-employed claims often become evidence-heavy — but when documented properly, they can still be assessed fairly.

Superannuation, Salary Packaging, and Non-Salary Benefits

This one catches people off guard. TAC generally considers a person’s salary to be the amount of gross earnings before salary is structured into a mix of
salary and non-salary benefits (salary packaging). However, TAC does not generally include the employer’s compulsory superannuation contribution in LOE calculations,
and TAC does not contribute to your super fund in place of your employer.

If you had a salary packaging arrangement (for example, novated lease, fringe benefits), you may want to ensure TAC has enough information to understand your true gross salary.
Otherwise, your PAWE can be misread.

Tax Withholding: Why Your Net LOE Can Look Different

LOE is typically paid as a gross amount, and tax withholding can apply.
TAC uses evidence of earnings and your ATO Tax File Number declaration to determine how much tax to withhold from LOE payments.

This becomes especially relevant for partial LOE. When you’re working part-time and also receiving partial LOE,
TAC may be treated as a “second employer” for taxation purposes, which can mean the tax-free threshold is applied to your wage from your employer,
and a different rate can apply to the LOE component.

Bottom line: you might see the “gross LOE” calculated correctly, but your net payment looks smaller than expected because tax withholding is different.

Worked Examples (Real-World Calculations)

Example 1: Total LOE (Fully Off Work)

Scenario: You earned $1,500 gross per week pre-accident (PAWE). Your doctor certifies you have no capacity for work for 10 weeks.

Base calculation: 80% of PAWE = 0.80 × $1,500 = $1,200 per week.

TAC then checks minimums and maximums. In many cases, the payable amount will be the greater of 80% PAWE or the prescribed minimum weekly amount,
and it cannot exceed the cap (lesser of prescribed maximum or 100% PAWE).

Common outcome: If you’re not hitting maximum caps, you may receive around $1,200 gross per week (with tax withheld).

Example 2: Partial LOE (Return to Work Part-Time)

Scenario: PAWE is $1,500 gross per week. You return to suitable duties 3 days/week and earn $600 gross per week.

Gap: PAWE ? CWE = $1,500 ? $600 = $900.

Partial LOE (85% of gap): 0.85 × $900 = $765 per week.

TAC then compares that to the minimum weekly amount less your current weekly earnings (and dependant allowances if relevant), and applies caps.

Common outcome: Your total gross income for the week might be approximately:
$600 (wage) + $765 (LOE) = $1,365 gross before tax effects. Your net amount will vary depending on tax withholding across both income streams.

Example 3: Variable Wages Week to Week

Scenario: You are casual. Your PAWE is assessed at $1,100. Your post-accident earnings change each week depending on what you can tolerate.

• Week A: You earn $400 ? gap = $700 ? LOE = 0.85 × 700 = $595
• Week B: You earn $650 ? gap = $450 ? LOE = 0.85 × 450 = $382.50

Why it matters: Your LOE reduces as your wage increases. That’s normal. But if TAC doesn’t have your payslips promptly, payments can be delayed or estimated.

Common Mistakes That Cause Underpayments or Delays

1) Not Providing Enough PAWE Evidence

If TAC only has a couple of payslips, it may not capture overtime, penalties, second jobs, or consistent patterns. More records usually mean a more accurate PAWE.

2) Forgetting a Second Job

If you had two employers and only provide evidence for one, PAWE can be under-assessed and every LOE payment that follows can be too low.

3) Gaps in Medical Certification

LOE is tied to incapacity due to accident injuries. If there’s a gap in certificates, TAC may question continuity of incapacity and pause payments.

4) Confusing Gross and Net Figures

LOE calculations are generally based on gross earnings, but you receive net payments after tax withholding. If you compare net-to-gross, it can look “wrong” when it’s not.

5) Post-Accident Earnings Not Reported Clearly

If your wages vary and TAC doesn’t have payslips or employer confirmations, your partial LOE can’t be calculated cleanly.
That can cause delays and, in some cases, overpayments/underpayments that later need correcting.

What to Do If Your LOE Calculation Seems Wrong

If you believe TAC has calculated your LOE incorrectly, try this practical approach:

1. Check PAWE first: Is the baseline correct? Did they include all employers? Did they use an appropriate period?
2. Confirm CWE: Are they using the correct post-accident weekly earnings? Are your payslips up to date?
3. Check whether it’s total or partial LOE: The formulas are different (80% vs 85% of the gap).
4. Ask for the calculation breakdown in writing: You want the numbers, not just the conclusion.
5. Fix evidence gaps quickly: extra payslips, employer letters, rosters, contracts, updated medical certificates.
6. Get advice if you hit a wall: Especially if the issue affects your ability to pay rent/mortgage or continue treatment.

The earlier you challenge a wrong baseline, the easier it is to correct. A small PAWE error today can turn into months of underpayment if it’s not fixed.

Final Thoughts: LOE Calculations Don’t Have to Be a Mystery

TAC Loss of Earnings in Victoria follows formulas — but those formulas only work properly when the inputs are right:
accurate PAWE, accurate current weekly earnings, and clear evidence that your loss is due to transport accident injuries.

If you’re fully off work, LOE commonly starts around 80% of PAWE (subject to minimums and maximums).
If you’re back at work part-time, partial LOE is commonly 85% of the gap between PAWE and what you earn now (again, subject to minimums and caps).

If your numbers don’t look right — or if the process is dragging — getting support early can save you a lot of stress (and sometimes a lot of money).

Recommendation: If you need guidance with a TAC claim in Melbourne or across Victoria — including LOE calculations, underpayments,
disputes, or planning for what happens after 18 months — consider contacting Hymans Legal.

? Call Hymans Legal on 1300 667 116
? Visit: https://hymanslegal.com.au/

The right advice can help you confirm your baseline earnings, tighten your evidence, and push back confidently if the calculation doesn’t match the facts.