NC Impairment Rating Payout: Scheduled Weeks and Deductions

In North Carolina, your impairment rating payout is the rating percentage your doctor assigns, multiplied by the scheduled weeks for the injured body part under N.C.G.S. § 97-31, multiplied by two-thirds of your average weekly wage. For injuries occurring in 2026, that weekly rate is capped at $1,446.¹ Everything else about your permanent partial disability check follows from those three numbers.

A quick example. A warehouse worker hurts a hand and the treating physician assigns a 15% impairment rating. The hand carries 200 scheduled weeks, so 15% of 200 is 30 compensable weeks. If average weekly wages were $900, the compensation rate is two-thirds of that, or $600. Thirty weeks times $600 equals an $18,000 payout.²

Scheduled Weeks for Each Body Part

Section 97-31 sets a fixed number of weeks for each body part. A total loss of that body part pays the full week count; a partial impairment pays a proportional share based on the rating percentage. The most common entries:

Arm: 240 weeks
Hand: 200 weeks
Leg: 200 weeks
Foot: 144 weeks
Eye: 120 weeks
Thumb: 75 weeks
Index finger: 45 weeks
Second finger: 40 weeks
Third finger: 25 weeks
Little finger: 20 weeks
Great toe: 35 weeks
Other toes: 10 weeks each

Losing one phalange of a finger counts as half of that finger’s total value under the statute.²

How Your Average Weekly Wage Is Set

Average weekly wage (AWW) is your total earnings over the 52 weeks before the injury divided by 52. Weeks you missed for more than seven consecutive days for non-work reasons drop out of both the earnings total and the divisor. If you worked for the employer less than a full year, the Commission uses the weeks you actually worked, provided the result is fair to both sides.³

Unusual work histories, seasonal jobs, recent job changes, or wild overtime swings can be handled through an alternative method that better reflects your real earning capacity. That matters because the straight 52-week average sometimes undercounts what you were actually making.

The compensation rate on your payout is two-thirds of that AWW, up to the state cap. For 2026 injuries the cap is $1,446 per week, which means anyone earning more than roughly $2,169 per week hits the ceiling and receives the same rate regardless of actual pay. The cap that applies to your claim is the one in effect the year you were injured, not the year you settle.

Back, Neck, and Other Unscheduled Injuries

Back injuries, neck injuries, traumatic brain injuries, and damage to internal organs are not on the schedule. They fall under § 97-31(24), a catch-all for important body parts not listed elsewhere, which caps the award at $20,000.²

That cap often shocks people. A permanent back injury that affects your ability to work for decades can produce a smaller PPD figure than a hand injury run through the formula. That is a major reason workers with serious unscheduled injuries look at ongoing disability benefits instead.

When Ongoing Disability Pays More Than a Rating

If your injury qualifies you for both scheduled PPD under § 97-31 and total disability under § 97-29 (or partial disability under § 97-30), you cannot collect both. You elect whichever gives the better result.⁴

Total disability under § 97-29 pays two-thirds of your AWW for as long as the disability continues, potentially for years. A scheduled rating pays a finite sum and ends. For a high rating on a low-value body part, or any unscheduled injury capped at $20,000, ongoing disability can be worth substantially more over time. The tradeoff is predictability: PPD is fixed, while total disability can be challenged and cut off.

Challenging a Low Impairment Rating

Because the rating percentage drives the entire payout, a low number costs real money. The gap between a 10% and a 15% rating on a hand injury is tens of thousands of dollars once the formula runs.

North Carolina law gives you the right to a second opinion on your rating. The examining physician must be in North Carolina unless an out-of-state evaluation is approved. Doctors generally reference the AMA Guides to the Evaluation of Permanent Impairment, though the North Carolina Industrial Commission also publishes its own rating guide that in-state physicians may consult.⁵

When two physicians disagree, the Commission weighs both opinions and makes its own determination. Rating disputes are one of the most common reasons PPD claims go to hearing instead of settling by agreement.

What Can Reduce the Check You Actually Keep

The formula gives you a gross number. Several things can change what lands in your account.

Attorney Fees

North Carolina does not set a fixed percentage cap on workers’ compensation attorney fees. Every fee must be approved by the Industrial Commission based on time invested, results, complexity, and the attorney’s experience.⁶ Most firms work on contingency, so the fee comes out of your award. On a straightforward rating with no dispute, that fee reduces your take-home. On a disputed rating or an election between benefit types, representation often more than pays for itself.

Federal Taxes

Workers’ compensation PPD payments are not taxed as federal income. Section 104(a)(1) of the Internal Revenue Code excludes amounts received under workers’ compensation acts from gross income.⁷ You will not get a 1099, and you do not report the payment on your return. The exclusion applies to both lump sums and weekly checks. Wage-continuation or sick-leave payments you receive after returning to work are regular income and taxed normally.

Social Security Disability Offset

If you draw SSDI at the same time as workers’ comp, your combined benefits cannot exceed 80% of your average current earnings before the injury. When the total goes over, the Social Security Administration reduces the SSDI check, not the workers’ comp.⁸ For a lump-sum PPD settlement, the SSA prorates the sum into a weekly equivalent. How the settlement is drafted, including language on life-expectancy proration and excludable expenses, directly affects the size of that SSDI reduction. Have the language reviewed before you sign.

Medicare Set-Aside

If you are already on Medicare or expect to enroll within 30 months of settling, CMS recommends a Workers’ Compensation Medicare Set-Aside and will review proposals above certain thresholds: $25,000 for current Medicare beneficiaries, and $250,000 for claimants with a reasonable expectation of enrolling within 30 months.⁹ The set-aside carves out funds for future injury-related medical care that Medicare would otherwise cover, which reduces your net settlement. Skipping it when it applies risks Medicare refusing to pay for related treatment later, which is the bigger financial hit.

How the Payment Reaches You

Once you and the carrier agree on the rating and the compensation amount, the figures are recorded on Form 26A, the Employer’s Admission of Employee’s Right to Permanent Partial Disability. It lists your AWW, compensation rate, physician’s rating, and total payout.¹⁰ After you sign, the carrier has 20 days to file it with the Commission. A Deputy Commissioner or claims examiner checks the math against the statute and the medical evidence, then issues an Order of Approval that makes the agreement binding.

Your first installment is due 10 days after the appeal period runs out, or 10 days after all parties waive their appeal rights, whichever comes first. If a payment is more than 14 days late, the carrier owes a 10% penalty on top of the unpaid amount, unless the Commission excuses the delay.¹¹

1
North Carolina Industrial Commission. Maximum Weekly Compensation Rates for 1982-2026
2
North Carolina General Assembly. North Carolina Code 97-31 – Schedule of Injuries; Rate and Period of Compensation
3
North Carolina Industrial Commission. North Carolina Code 97-2 – Definitions
4
North Carolina Industrial Commission. North Carolina Code 97-29 – Compensation Rates for Total Incapacity
5
North Carolina Industrial Commission. N.C. Industrial Commission Rating Guide
6
North Carolina Industrial Commission. North Carolina Code 97-90 – Legal and Medical Fees to Be Approved by Commission
7
Office of the Law Revision Counsel. 26 USC 104 – Compensation for Injuries or Sickness
8
Office of the Law Revision Counsel. 42 USC 424a – Reduction of Disability Benefits
9
Centers for Medicare & Medicaid Services. Workers’ Compensation Medicare Set Aside Arrangements
10
North Carolina Industrial Commission. Form 26A – Employer’s Admission of Employee’s Right to Permanent Partial Disability
11
North Carolina General Assembly. North Carolina Code 97-18 – Prompt Payment of Compensation Required