Disability payments are calculated differently depending on the program. Social Security Disability Insurance (SSDI) bases your monthly check on your lifetime earnings history using a specific formula. Supplemental Security Income (SSI) pays a flat maximum that gets reduced by your other income. Private disability insurance typically pays a percentage of your pre-disability salary, minus offsets. Here’s how the math works for each.
How SSDI Calculates Your Payment
SSDI payments are based on how much you earned and paid Social Security taxes on throughout your working life. The Social Security Administration uses a two-step process: first it calculates your Average Indexed Monthly Earnings (AIME), then it runs that number through a formula to determine your Primary Insurance Amount (PIA), which is your actual monthly benefit.
Step 1: Average Indexed Monthly Earnings
The SSA looks at your annual earnings going back to age 21 (or 1951, whichever is later) and adjusts older earnings upward to account for wage growth over time. This “indexing” ensures that money you earned 20 years ago is compared fairly to recent wages. The SSA then drops your lowest-earning years and averages the remaining ones. For disability specifically, the number of years included depends on your age when you became disabled. If you became disabled at 50, for example, fewer years are averaged than if you became disabled at 60.
Your total indexed earnings for the counted years are added up, divided by the total number of months in those years, and the result is your AIME. This single number represents your average monthly income across your working career, adjusted for inflation.
Step 2: The PIA Formula
Your AIME gets run through a three-tier formula that replaces a higher percentage of income for lower earners and a smaller percentage for higher earners. For someone first becoming eligible in 2026, the formula works like this:
- 90% of the first $1,286 of your AIME
- 32% of your AIME between $1,286 and $7,749
- 15% of any AIME above $7,749
The dollar thresholds ($1,286 and $7,749) are called “bend points,” and they change each year with wage inflation. You add the three pieces together, and the result is your monthly SSDI payment, rounded down to the nearest dime.
A Quick Example
Say your AIME comes out to $5,000. Your PIA would be:
- 90% × $1,286 = $1,157.40
- 32% × ($5,000 − $1,286) = 32% × $3,714 = $1,188.48
- Nothing in the third tier (your AIME didn’t exceed $7,749)
Total: $2,345.88, rounded down to $2,345.80 per month. That would be your SSDI check before any deductions like Medicare premiums, which start automatically 24 months after your disability benefits begin.
Someone with a much lower AIME of $2,000 would get about $1,385 per month. Someone at the high end with an AIME of $10,000 would get roughly $3,555. The formula is progressive by design, replacing a larger share of income for people who earned less.
How SSI Payments Work
SSI is a separate program from SSDI. It’s for people who are disabled (or aged 65 and older) and have very limited income and resources, regardless of their work history. The math is simpler but depends heavily on your personal financial situation.
The starting point is the federal benefit rate: $994 per month for an individual or $1,491 for an eligible couple in 2026. That’s the maximum. Your actual payment is reduced dollar-for-dollar by your “countable income,” which includes most money coming in from other sources. The SSA excludes certain amounts before counting your income. For earned income (wages from a job), the first $65 per month plus half of anything above that is excluded. For unearned income (like a pension or family support), the first $20 per month is excluded.
So if you’re a single person on SSI with $300 per month in unearned income, the SSA would subtract $20 (the general exclusion), leaving $280 in countable income. Your SSI payment would be $994 minus $280, or $714 per month. Some states add a supplement on top of the federal rate, which can increase your total payment.
If you receive both SSDI and SSI (which is possible if your SSDI payment is very low), your SSDI counts as unearned income and reduces your SSI accordingly.
How Private Disability Insurance Is Calculated
Employer-sponsored and individual long-term disability policies use a completely different approach. Most plans pay a fixed percentage of your pre-disability salary, commonly between 50% and 70% of your base pay. Short-term disability policies use similar percentages but cover a shorter window, usually three to six months.
The core calculation is straightforward: take your annual base salary, multiply by the benefit percentage, and divide by 12. If your salary is $42,000 and your plan pays 65%, that’s $42,000 × 0.65 = $27,300 per year, or $2,275 per month before any reductions.
Social Security Offsets
Here’s where private disability gets more complicated. Most group long-term disability policies include a Social Security offset, meaning they reduce your private benefit by the amount of SSDI you receive or are entitled to receive. Using the example above, if your gross private benefit is $2,275 per month and you also qualify for $1,000 per month in SSDI, the insurer subtracts that $1,000. Your private policy then pays $1,275, and combined with your SSDI you still receive $2,275 total.
This is why many insurers actively encourage (or even require) you to apply for SSDI. Every dollar you receive from Social Security is a dollar they don’t have to pay. Some policies offset not just your individual SSDI benefit but also any dependent benefits your family members receive on your record.
Individual disability policies that you buy on your own are less likely to include Social Security offsets, but they cost more in premiums as a result. Check your policy’s “other income” or “offset” provisions to see exactly what gets subtracted.
Workers’ Compensation Disability Payments
If your disability resulted from a workplace injury or illness, workers’ compensation may apply instead of, or alongside, other programs. Workers’ comp typically pays two-thirds of your average weekly wage, subject to a state-set maximum. The calculation usually looks at your earnings over a recent period (often the 52 weeks before your injury), averages them into a weekly figure, and applies the benefit percentage.
Workers’ comp and SSDI can overlap, but there’s a cap. Federal law limits the combined total of your SSDI and workers’ comp payments to 80% of your pre-disability average earnings. If the two together exceed that, the SSA reduces your SSDI payment until you’re at the 80% threshold.
Factors That Change Your Final Amount
Several things can shift your disability payment up or down from the base calculation. Cost-of-living adjustments (COLAs) increase SSDI and SSI payments annually based on inflation. If you start receiving SSDI this year, your benefit will be adjusted upward each January going forward.
Taxes also matter. If your total income (including half your SSDI benefits) exceeds certain thresholds, up to 85% of your SSDI can be subject to federal income tax. SSI payments are not taxable. Private disability benefits are taxable if your employer paid the premiums but tax-free if you paid the premiums yourself with after-tax dollars.
Your family situation can affect SSDI as well. Your spouse and minor children may qualify for auxiliary benefits based on your earnings record, typically up to 50% of your PIA each. However, there’s a family maximum that caps total household benefits, generally between 150% and 187% of your PIA depending on the amount.
To estimate your own SSDI benefit before applying, create an account at ssa.gov. Your Social Security Statement includes a disability benefit estimate based on your actual earnings history, giving you a reasonably accurate preview of what you’d receive.