Tennessee Workers’ Comp Settlement Chart: Rates, Offsets, Deadlines

A Tennessee workers’ compensation settlement chart comes down to three numbers multiplied together: your impairment rating, the benefit weeks assigned to the body part you injured, and two-thirds of your pre-injury average weekly wage. For injuries occurring between July 1, 2025 and June 30, 2026, the weekly payment is capped at $1,297.00 for permanent disability and $1,426.70 for temporary disability, with a minimum of $194.55.¹ Scheduled injuries are tied to a fixed number of weeks per body part. Whole-body injuries share a single 450-week schedule. Return-to-work status can then multiply the result.

The Weekly Rate

Your weekly benefit is 66.67% of your average weekly wage before the injury. That percentage applies to both temporary and permanent disability payments, but the ceilings differ. Temporary disability tops out at 110% of the statewide average weekly wage. Permanent partial disability for whole-body injuries tops out at 100%. For the July 1, 2025 through June 30, 2026 benefit year, those ceilings work out to $1,426.70 and $1,297.00 per week.¹

The caps are refreshed every July 1. If you earn well above the state average, two-thirds of your wage will hit the ceiling and your benefit will not reflect your full lost income. If two-thirds of your wage falls below $194.55, you get the minimum instead. Physicians assign the impairment rating that drives everything else, using the AMA Guides to the Evaluation of Permanent Impairment, Sixth Edition, adopted in Tennessee for injuries occurring on or after July 1, 2014.²

Scheduled Injuries

Tennessee statute assigns a fixed number of benefit weeks to injuries affecting specific body parts. The impairment percentage your doctor assigns determines how many of those weeks you actually collect.³ Two common examples:

Hand: 150 weeks
Foot: 125 weeks

The math is straightforward. A 20% impairment rating to the hand gives you 20% of 150 weeks, or 30 weeks of benefits. At the 2025–2026 permanent maximum of $1,297.00 per week, that is $38,910 before any reductions.³ Your actual weekly rate is two-thirds of your own wage; you only reach the cap if two-thirds of your wage exceeds it.

Amputation or total loss of use of a scheduled body part pays the full number of weeks assigned to that member. Partial impairments are rated under the AMA Guides, Sixth Edition.

Whole-Body Impairment

Injuries to a part not listed on the scheduled chart — most commonly the spine, brain, lungs, or internal organs — fall into the whole-body category and are measured against a single 450-week maximum.³

A 25% whole-body rating equals 25% of 450 weeks, or 112.5 weeks. At the current $1,297.00 permanent maximum, that is roughly $145,912. The absolute ceiling for a 100% whole-body rating at the 2025–2026 rate is $583,650.¹

Whole-body cases are usually more contested than scheduled ones. Spinal and traumatic brain injuries are difficult to rate, and insurers routinely counter the treating physician’s rating with an independent medical evaluation. A few percentage points can move the settlement by tens of thousands of dollars.

Return-to-Work Multipliers

Two workers with identical injuries can settle for very different amounts depending on what happens after they reach maximum medical improvement. A worker who returns to the same employer at the same or greater wages is limited to a lower multiplier on the impairment rating. A worker who cannot return to the pre-injury job, or who returns at significantly reduced wages, can receive a higher multiplier, up to six times the impairment rating.⁴

A 20% whole-body rating for a worker who cannot go back could be calculated on up to 120% of the 450-week base (20% × 6). The same rating for a worker back on full duty at full pay produces a much smaller award. Vocational experts weigh in on transferable skills, education, age, and the local job market, and the Bureau of Workers’ Compensation uses those factors to set the multiplier. The medical rating establishes the floor. The vocational evidence decides how far above it you land.

Deadlines That Can Erase the Settlement

Two deadlines control whether there is a settlement to calculate at all.

Notice to your employer must go out within 15 days of the injury. Written notice is safer than oral. Missing this window can bar the claim unless the employer already had actual knowledge of the injury.⁵

The formal claim must be filed within one year of the date of injury, or within one year of the last temporary disability payment, whichever is later.⁶ For occupational diseases that develop over time, including hearing loss, repetitive stress injuries, and lung conditions from workplace exposure, the clock starts when you know or reasonably should know the condition is work-related, not when the exposure began.

What Comes Out of the Settlement

The gross number on a settlement sheet is not what lands in your account. Three items commonly reduce it.

Attorney Fees

Tennessee caps workers’ compensation attorney fees at 20% of the recovery or award, and the workers’ compensation judge must approve the fee.⁷ Attorneys almost always work on contingency, so nothing is paid upfront. On a $50,000 settlement, the maximum fee is $10,000. For whole-body cases, the 20% cap applies to the first 450 weeks of the award.

SSDI Offset

If you receive Social Security Disability Insurance, the combined total of your SSDI and workers’ compensation cannot exceed 80% of your average current earnings before the disability. Anything over that threshold reduces your SSDI check by the excess. The offset continues until you reach full retirement age or your workers’ compensation ends. Lump-sum settlements can trigger the same offset, and how the lump sum is structured on paper can affect SSDI payments for years.⁸

Medicare Set-Aside

If you are already on Medicare or expect to enroll within 30 months of settling, part of the money may need to sit in a Workers’ Compensation Medicare Set-Aside account to pay future injury-related medical care that Medicare would otherwise cover.⁹ CMS will review a proposed set-aside when:

You are a current Medicare beneficiary and the total settlement exceeds $25,000, or
You have a reasonable expectation of Medicare enrollment within 30 months (for example, you have applied for Social Security Disability Benefits or you are 62½ years old) and the settlement exceeds $250,000.

Set-aside funds live in a separate interest-bearing account and can only be spent on Medicare-covered services and prescriptions related to the work injury. Non-covered items such as acupuncture or routine dental care cannot be paid from the account. Once the account is legitimately exhausted, Medicare picks up future injury-related treatment.⁹

Lump Sum Versus Weekly Checks

Tennessee allows periodic benefits to be converted into a single payment with approval from a workers’ compensation judge, who evaluates whether the lump sum is in the worker’s best interest and whether the worker can manage the money.¹⁰ Taking a lump sum usually means giving up future benefits tied to the injury, including ongoing medical treatment and any later complications. Present-value discounting is often applied when weekly payments are converted, which can bring the total below what the same schedule would pay over time.

Taxes on the Proceeds

Workers’ compensation benefits paid under Tennessee’s act are exempt from federal income tax. That covers weekly disability payments, lump-sum settlements, and benefits paid to survivors after a fatal workplace injury.¹¹

Two limits apply. Wages you earn for light-duty work after returning to the job are taxable; only the workers’ compensation portion stays exempt. And if you retired because of the injury and receive a disability pension partly based on years of service, only the portion attributable to the work-connected disability is tax-free. The rest is taxed as pension income.¹¹

1
TN.gov. Tennessee Workers’ Compensation Max and Min Comp Rates
2
TN.gov. Guidance on Impairment Ratings for Pain
3
TN.gov. A Beginner’s Guide to TN Workers’ Compensation
4
Justia. Tennessee Code 50-6-242 – Additional Disability Benefits
5
Justia. Tennessee Code 50-6-201 – Notice of Injury
6
Justia. Tennessee Code 50-6-203 – Limitation of Time, Claims and Proceedings
7
Justia. Tennessee Code 50-6-226 – Fees of Attorneys
8
SSA. How Workers’ Compensation and Other Disability Payments May Affect Your Benefits
9
CMS. WCMSA Reference Guide Version 4.4
10
Justia. Tennessee Code 50-6-229 – Commutation to Lump Sum Payment With Consent of Court
11
IRS. Publication 525 (2025), Taxable and Nontaxable Income