Short-term disability replaces a percentage of your wages, not your full paycheck

Short-term disability insurance pays between 50 and 70 percent of your regular weekly wages, depending on the plan your employer offers. The exact amount varies by employer, state, and the specific policy — there is no federal standard that applies everywhere. Most plans cap the weekly payment at a dollar amount rather than a percentage, which means higher earners hit the cap while lower-wage workers receive closer to their full lost income.

The payment is meant to cover basic living expenses while you recover from surgery, injury, or illness. It is not designed to replace your entire salary. If your plan pays 60 percent of your wages and you normally earn $1,000 per week, you would receive approximately $600 per week while on short-term disability — but only if your plan has no weekly maximum. If the plan has a $500 weekly maximum, you would receive $500 instead.

Waiting periods also affect what you actually receive. Most short-term disability plans have a waiting period of 7 to 14 days before payments begin. During that time, you receive nothing, even though you cannot work. Some employers cover the first few days through paid sick leave or short-term disability that starts when ready, but many do not.

Key Takeaways

  • Short-term disability typically replaces 50 to 70 percent of your weekly wages, with most plans paying closer to 60 percent.
  • Plans usually have a weekly maximum dollar amount, which means the actual payment depends on both your salary and your plan's cap.
  • A waiting period of 7 to 14 days is standard, during which you receive no payment even though you cannot work.
  • The total amount you receive depends on how long your condition lasts — most plans cover 3 to 6 months, though some extend to 12 months.
  • Your employer's plan documents spell out the exact percentage, weekly maximum, and waiting period for your specific coverage.

How the percentage and weekly maximum work together

The percentage your plan pays is only part of the calculation. The weekly maximum is the hard ceiling on what you receive, regardless of your salary. If your plan pays 60 percent with a $500 weekly maximum, and you earn $1,200 per week, the math works like this: 60 percent of $1,200 is $720, but your plan caps payments at $500, so you receive $500.

Conversely, if you earn $600 per week, 60 percent is $360, which is below the $500 cap, so you receive $360. The weekly maximum protects the insurance company's costs but means higher earners lose more income relative to their normal pay.

Some plans also have a monthly maximum, which limits total payments in a calendar month. This is less common than a weekly cap but can further reduce what you receive if you are paid on an irregular schedule or if your employer calculates benefits differently.

How long short-term disability lasts

Short-term disability typically covers 3 to 6 months of lost wages. Some plans extend to 12 months, but that is less common. The length of coverage depends entirely on what your employer's plan provides — there is no legal minimum or maximum at the federal level.

Once your short-term disability benefits end, you may transition to long-term disability if your employer offers it, or your benefits straightforward stop. If you still cannot work after short-term disability runs out, you would need to explore other options like unpaid leave under the Family and Medical Leave Act (FMLA), if you may have access to, or eventually Social Security Disability Insurance (SSDI) if your condition is expected to last at least 12 months.

The clock for short-term disability usually starts on the first day you are unable to work, not the first day you file a claim. However, the waiting period means you do not receive payment for the first 7 to 14 days, even though the benefit period has begun.

What affects the amount you receive

Your actual payment depends on several factors beyond the plan's stated percentage. Your gross weekly wage is the starting point — this is your salary before taxes and deductions. Some plans calculate benefits on your base salary only, while others include bonuses or commissions if you have been receiving them consistently.

If you work part-time or have variable hours, the plan usually averages your earnings over the past 12 weeks or uses your most recent pay stub. This can work in your favor if you recently received a raise, or against you if your hours have been cut.

Taxes are another consideration. Short-term disability payments are usually subject to federal income tax and state income tax, depending on your state. Some states do not tax disability benefits, but most do. This means the amount you receive is gross pay, and you will owe taxes on it when you file your return — or the plan may withhold taxes automatically.

How to find out what your plan pays

Your employer's human resources or benefits department has the official plan documents, usually called a Summary Plan Description (SPD) or benefits summary. This document lists the exact percentage your plan pays, the weekly maximum, the waiting period, and how long benefits last. Request it in writing or through your employee benefits portal if your employer has one.

If you cannot locate the plan documents, ask your HR department directly: "What percentage of my weekly wages does short-term disability pay, what is the weekly maximum, and when do payments begin?" Write down the answers and ask for them in writing so you have a record.

Some employers also have a benefits counselor or employee information program (EAP) that can walk you through the plan. This is especially useful if your plan is complex or if you are trying to estimate what you would receive for a specific condition.

How short-term disability interacts with other income sources

If you receive workers' compensation for a work-related injury, short-term disability may be reduced or eliminated. Most plans have an "offset" clause that reduces short-term disability benefits by the amount you receive from workers' comp. Check your plan documents for this language.

Unemployment benefits do not typically offset short-term disability, because you are not considered unemployed — you are temporarily unable to work due to a medical condition. However, some states have specific rules, so verify with your state's unemployment office if you are unsure.

If you are receiving Social Security Disability Insurance (SSDI) while also on short-term disability, the two programs do not directly offset each other. However, SSDI has a five-month waiting period before payments begin, so you would rely on short-term disability during those first months. Once SSDI begins, you may continue to receive short-term disability if your plan allows it, though this is uncommon.

What happens when short-term disability ends

When your short-term disability benefits expire, your employer is not required to hold your job open unless you are covered by the Family and Medical Leave Act (FMLA). FMLA protects your job for up to 12 weeks of unpaid leave in a 12-month period, but only if your employer has 50 or more employees and you have worked there for at least 12 months.

If you still cannot work after short-term disability ends and FMLA does not explore, you may be terminated. Some employers offer long-term disability, which begins where short-term disability ends, but this is optional and not all employers provide it. If you have a condition expected to last 12 months or longer, you may be able to file for Social Security Disability Insurance, though the approval process takes several months.

Before your short-term disability ends, contact your HR department to understand what happens next. Ask whether long-term disability is available, whether FMLA applies to you, and what your options are if you still cannot return to work.

Frequently Asked Questions

Does short-term disability pay for the first week I cannot work?

Usually not. Most plans have a 7 to 14-day waiting period before payments begin. During that time, you receive no payment, even though you cannot work. Some employers cover the waiting period through paid sick leave or a separate short-term disability benefit that starts when ready, but this is not standard.

Is short-term disability taxed?

Yes, in most cases. Short-term disability payments are subject to federal income tax and state income tax in most states. A few states do not tax disability benefits, but you should assume yours will be taxed unless your state specifically exempts it. The plan may withhold taxes automatically, or you may owe them when you file your return.

What if I earn commission or bonuses — does short-term disability include those?

It depends on your plan. Some plans calculate benefits on base salary only, while others include commissions or bonuses if you have been receiving them consistently. Check your plan documents or ask your HR department how they calculate your weekly wage for benefit purposes.

Can my employer reduce my short-term disability if I receive workers' compensation?

Yes. Most plans have an offset clause that reduces short-term disability by the amount you receive from workers' compensation. This is legal and common. Your plan documents should explain how the offset works.

What happens if I am still unable to work when short-term disability ends?

Your employer is not required to extend your job unless you may have access to for FMLA protection, which covers up to 12 weeks of unpaid leave. If you still cannot work after short-term disability and FMLA expire, you may be terminated. Long-term disability or Social Security Disability Insurance may be options, depending on your situation and your employer's offerings.