The offer and the fee agreement
Liens and reimbursement claims
Fill in the figures, then click Work out my net.
Net to the client
If the offer were different
| Gross | Client nets | Share of gross |
|---|
What it does, and what it leaves to you
- Counts: net = gross, less fee, less costs, less each lien after its reduction, less tax on the taxable portion, less any set-aside. Medicare lines are reduced by (fee + costs) / gross, the pro-rata procurement-cost share.
- Not decided: whether a lien is valid or what your state allows it to claim; the final Medicare demand; ERISA plan terms; whether the damages are taxable; structured settlements; minors' and special-needs rules; and whether to accept the offer.
Common questions
How is the net amount of an injury settlement calculated?
Start with the gross settlement. Subtract the attorney's contingency fee, the costs the firm advanced (experts, filing, records), and the amounts owed to lienholders such as health insurers, hospitals and Medicare. Subtract tax on any taxable slice. What is left is the client's net.
Is the attorney fee taken before or after costs?
It depends on the fee agreement. If the percentage applies to the gross, costs come off after the fee; if it applies to the settlement net of costs, the fee is smaller. On a 33% fee and $6,500 of costs that is about $2,100 of difference. Check the wording and enter the basis your agreement uses.
Can medical liens be reduced?
Often, yes. Hospitals, insurers and providers commonly accept less than the billed amount because the money exists only through the attorney's work, and some states reduce statutory liens by the share of fees and costs. Enter a negotiated reduction percent for each lien to see its effect. This worksheet does not know your state's rules.
How does Medicare reduce what it is owed?
Under federal regulation Medicare's recovery is reduced by the pro-rata share of procurement costs, which is attorney fees plus costs divided by the gross settlement. This tool applies that formula to any line with Medicare in its name. The final demand letter from Medicare is what you actually pay.
Are injury settlements taxable?
Damages received on account of personal physical injury or sickness are generally not taxable, but punitive damages and interest usually are, and some emotional-distress awards. Enter the taxable portion and your rate to set money aside. A tax adviser should decide the split.
Does this tell me whether to accept an offer?
No. It does arithmetic on the figures you enter. A bigger settlement can net less than a smaller one if the liens do not move, so the table shows the client's net at several gross amounts. Talk to your attorney about the decision.
Is my data uploaded anywhere?
No. Everything is worked out in your browser and nothing is sent; a test in the code asserts there are no network calls.
Offered cash for future settlement payments? See the structured settlement buyout calculator.