·9 min read
What Evidence Is Needed to Calculate Past Loss of Earnings?
What employment, tax, and financial records an earnings expert may need when calculating past loss of earnings — and how incomplete evidence is handled.
Calculating past loss of earnings generally involves examining the income a claimant might have received during a relevant period and comparing it with the income actually received.
For an earnings expert, the reliability of the analysis can depend on the quality and completeness of the available evidence. Employment records, payroll information, tax documents and other financial records may help establish the claimant's earnings history and identify changes following an injury, illness or other relevant event.
The precise evidence required will depend on the circumstances of the individual case. An earnings expert may also need to consider gaps in employment, changes in working hours, bonuses, overtime, self-employment income or other factors affecting earnings.
What Is Past Loss of Earnings?
Past loss of earnings generally concerns income that may have been lost between the relevant date of an incident and a specified assessment date.
A calculation may involve several stages:
- Establishing the claimant's actual earnings before the relevant event.
- Considering the earnings that might have been received during the relevant period.
- Identifying the income actually received after the event.
- Accounting for relevant changes in employment or earnings.
- Considering the difference between the relevant earnings figures, subject to the evidence, assumptions and methodology applicable to the case.
The analysis will depend on the facts of the particular case and the evidence available.
Employment Records and Payslips
For an employed claimant, employment records can provide useful evidence of historical earnings.
Relevant documents may include:
- Payslips covering periods before and after the relevant event
- Employment contracts
- Payroll records
- Records of working hours
- Overtime records
- Bonus or commission statements
- Records of pay increases
- Employment correspondence concerning changes in duties or hours
- Records showing periods of absence
A suitable period of employment records may help an earnings expert consider whether earnings were relatively consistent or subject to significant fluctuations.
Why Employment History Matters
The claimant's employment history can help put changes in earnings into context.
For example, an earnings expert may need to consider whether changes in income were associated with:
- Reduced working hours
- Absence from work
- A change of role
- A change of employer
- Promotion
- Pay increases
- Overtime
- Commission
- Bonus payments
- Changes in working patterns
These factors may be relevant when reconstructing past earnings.
Tax Records
Tax records can provide another source of information about historical earnings.
Depending on the circumstances, relevant documents may include:
- Annual tax summaries (such as P60s)
- Leaving statements (such as P45s)
- Self Assessment tax returns
- Tax calculations
- Tax year overviews
- PAYE records
- Records relating to taxable benefits
Tax records may help when checking annual earnings against payroll or other financial information.
They should generally be considered alongside the wider employment and financial evidence. A tax document may show taxable income for a particular period without explaining every change in the claimant's working circumstances.
Bank Statements and Other Financial Records
Bank statements may sometimes assist in establishing income actually received during a particular period.
They can be relevant where other employment or financial records are incomplete, or where an expert needs to examine particular payments.
Depending on the circumstances, other potentially relevant evidence may include:
- Invoices
- Remittance records
- Accounting records
- Business bank statements
- Dividend records
- Commission statements
- Expense records
- Financial schedules
The relevance of these documents will depend on the claimant's circumstances and the nature of the income being considered.
Evidence of Absence From Work
Where past loss is associated with time away from employment, evidence concerning absence may be relevant.
This could include:
- Employer records
- Absence records
- Occupational records
- Medical certificates
- Correspondence concerning absence
- Records of statutory or contractual sick pay
- Records showing a return to work
For the purposes of an earnings analysis, the expert may consider when the claimant was absent, what earnings were affected and what income was received during that period.
Medical evidence may help establish the relevant circumstances or period of absence, while the earnings expert's role is generally concerned with the financial analysis arising from those circumstances.
Evidence of Actual Earnings After the Relevant Event
A past loss calculation may require information about what the claimant actually earned during the period being assessed.
This may include records showing:
- Salary received
- Overtime worked
- Bonuses
- Commission
- Benefits
- Sick pay
- Statutory payments
- Income from alternative employment
- Changes in working hours
Actual earnings may provide an important reference point when considering the difference between the claimant's actual position and the earnings scenario being assessed.
Evidence About Overtime, Bonuses and Commission
Basic salary does not necessarily represent a claimant's complete remuneration.
Where overtime, bonuses or commission formed part of the claimant's remuneration, an earnings expert may need evidence showing how these payments operated before and after the relevant event.
Useful evidence could include:
- Historical payslips
- Bonus statements
- Commission statements
- Employer records
- Employment contracts
- Records of overtime hours
The historical pattern may be relevant because occasional payments can differ from regular or recurring elements of remuneration.
Evidence for Self-Employed Claimants
Past loss can involve additional considerations where the claimant is self-employed.
An expert may need to examine both the claimant's personal income and relevant business records.
Potentially relevant evidence may include:
- Accounts
- Tax returns
- Management accounts
- Business bank statements
- Invoices
- Sales records
- Payroll records
- Business expenses
- VAT records
- Records of drawings
- Records of dividends where applicable
- Information about the claimant's role in the business
The analysis may also consider whether the business continued operating during the relevant period and whether other people performed work previously undertaken by the claimant.
Understanding the Difference Between Business Turnover and Personal Earnings
Business turnover is not necessarily the same as income received or available to the claimant.
An earnings expert may therefore need to distinguish between:
- Revenue generated by the business
- Business expenses
- Profit
- Amounts paid to the claimant
- Income retained within the business
- Other sources of personal income
The appropriate approach will depend on the structure and circumstances of the business.
Evidence of Alternative Employment
Some claimants may return to their original employment, move to another employer or undertake different work following the relevant event.
Potentially relevant evidence may include:
- New employment contracts
- Payslips
- Records of working hours
- Job descriptions
- Salary information
- Correspondence about changes in employment
- Records of periods between jobs
This information may help establish actual post-event earnings and the timing of changes in employment.
Evidence of Benefits and Other Remuneration
Salary may form only part of an employee's remuneration.
Depending on the circumstances, an earnings expert may need to consider evidence relating to:
- Pension contributions
- Company cars
- Private medical benefits
- Allowances
- Employer-funded benefits
- Other contractual remuneration
Whether a particular benefit is relevant to a past loss of earnings calculation will depend on the circumstances and methodology being applied.
What If Some Evidence Is Missing?
It is possible for an earnings expert to encounter incomplete records.
For example, an employer may no longer hold older payroll records, or a self-employed claimant may have gaps in accounting documentation.
Where evidence is missing, other available records may help establish relevant information. These might include tax records, bank statements, payslips, accounts, correspondence or other available financial evidence.
Incomplete evidence does not necessarily prevent an analysis, although it may require additional assumptions and can affect the level of uncertainty in the calculation.
Any material assumptions or limitations arising from incomplete evidence should be identified and explained within the context of the analysis.
How an Earnings Expert May Approach the Evidence
The available evidence is generally considered as a whole rather than in isolation.
An earnings expert may need to:
- Establish the claimant's earnings history.
- Identify relevant changes before the loss period.
- Determine the period affected by the alleged loss.
- Review actual earnings during that period.
- Identify relevant payments and deductions.
- Consider employment or business changes.
- Compare the available evidence with the assumptions required for the calculation.
- Explain the basis of the resulting calculation.
The precise approach will depend on the facts, evidence and issues arising in the particular case.
For more information about the types of work undertaken in this area, see the loss of earnings services.
Preparing Evidence for a Past Loss of Earnings Calculation
A well-organised evidence bundle may make it easier to identify information relevant to the calculation.
Depending on the circumstances, a useful starting set of documents may include:
- Employment contracts
- Payslips
- Annual tax summaries and leaving statements
- Tax records
- Payroll records
- Bank statements
- Overtime and bonus records
- Commission statements
- Absence records
- Evidence of alternative employment
- Pension or benefit information
- Business accounts for self-employed claimants
- Invoices and other business records where relevant
The documents required will vary between cases. An earnings expert may request additional information once the employment history and calculation issues have been reviewed.
Information about the firm's wider expertise in loss of earnings matters may also help explain the types of issues that can arise in different cases.
Conclusion
Past loss of earnings calculations depend on evidence that helps establish both the claimant's historical earnings and the income actually received during the relevant period.
For employees, payslips, employment records, tax documents and evidence concerning absence may be relevant. For self-employed claimants, the analysis may require additional business and accounting records.
Where records are incomplete, other evidence may help, but the limitations and assumptions should be clearly identified. The appropriate evidence will ultimately depend on the individual circumstances and the questions the earnings expert has been asked to address.
Disclaimer: This article provides general information about evidence that may be relevant to past loss of earnings calculations. It is not legal or financial advice, and the documents required will vary depending on the circumstances of the individual case.
Last Reviewed: September 2026