Arizona Revised Statutes

Ariz. Rev. Stat. § 23-1041 (2026)

Basis for computing compensation; definition

✓ current as of May 2026
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A. Every employee of an employer within the provisions of this chapter who is injured by accident arising out of and in the course of employment, or the employee's dependents in the event of the employee's death, shall receive the compensation fixed in this chapter on the basis of the employee's average monthly wage at the time of injury.

B. If the injured or killed employee has not been continuously employed for the period of thirty days immediately preceding the injury or death, the average monthly wage shall be such amount as, having regard to the previous wage of the injured employee or of other employees of the same or most similar class working in the same or most similar employment in the same or neighboring locality, reasonably represents the monthly earning capacity of the injured employee in the employment in which the injured employee is working at the time of the accident.

C. If the employee is working under a contract by which the employee is guaranteed an amount per diem or per month, notwithstanding the contract price for such labor, the employee or the employee's subordinates or employees working under the terms of such contract or the employee's or their dependents in case of death shall be entitled to receive compensation on the basis only of the guaranteed wage as set out in the contract of employment, whether paid on a per diem or monthly basis, but in no event shall the basis be less than the wages paid to employees for similar work not under contract.

D. Notwithstanding any other provision of this chapter, in computing the average monthly wage there shall be excluded from such computation all wages or other compensation for services in excess of:

1. One thousand three hundred twenty-five dollars per month for employees injured before January 1, 1988.

2. One thousand six hundred fifty dollars per month for employees injured from and after December 31, 1987 but before July 1, 1989.

3. One thousand eight hundred dollars per month for employees injured from and after June 30, 1989 but before July 1, 1991.

4. Two thousand one hundred dollars per month for employees injured from and after June 30, 1991 but before August 6, 1999.

5. Two thousand four hundred dollars per month for employees injured on or after August 6, 1999 but before January 1, 2008.

6. Three thousand dollars per month for employees injured from and after December 31, 2007 but before January 1, 2009.

7. Three thousand six hundred dollars per month for employees injured from and after December 31, 2008 but before January 1, 2010.

8. The amount adopted by the commission under subsection E for employees injured on or after January 1, 2010.

E. For purposes of subsection D, paragraph 8, the commission, not later than August 1 of each calendar year, beginning August 1, 2009, shall adopt an amount that adjusts the amount from the prior year to reflect the annual percentage increase in the bureau of labor statistics employment cost index for the prior calendar year.  The amount adopted by the commission shall be effective for the following calendar year and shall apply to all injuries occurring during that calendar year.  In adopting the amount under this subsection, the commission shall not decrease the amount from the prior year or increase the amount more than five per cent from the prior year.

F. Prior to a determination of the average monthly wage, compensation shall be paid on a basis of a minimum monthly wage of two hundred dollars for employees eighteen years of age or over.

G. For the purposes of this section, "monthly wage" means the average wage paid during and over the month in which the employee is killed or injured.

 

Notes of Decisions
Cited in 122 cases (3 in the last 5 years), 1956–2025 · leading case: Senor T's Restaurant v. Indus. Comm'n, 641 P.2d 848 (Ariz. 1982).
Senor T's Restaurant v. Indus. Comm'n, 641 P.2d 848 (Ariz. 1982). · cites it 36× “Prior to the Scott decision, the Court of Appeals had construed A.R.S. § 23-1041 as excluding tips from the definition of "monthly wage.”
Wiley v. Indus. Com'n of Arizona, 847 P.2d 595 (Ariz. 1993). · cites it 24× “es from concurrent “dissimilar” employment be overruled? Essentially, the issue before us is whether Wiley’s total wages from his various jobs should be aggregated in computing his average monthly wage (and thus in determining his lost earning capacity and resulting…”
Cnty. of Maricopa v. Indus. Comm'n of Arizona, 699 P.2d 389 (Ariz. Ct. App. 1985). · cites it 24× “While I agree with the majority on the jurisdictional and medical proof issues, I disagree with them on the double recovery issue.”
McPeak v. Indus. Comm'n, 741 P.2d 699 (Ariz. Ct. App. 1987). · cites it 19× “The claimant asserts that A.R.S. § 23-1041, which dictates the maximum average monthly wage, violates Art.”
Scott v. Indus. Comm'n, 593 P.2d 919 (Ariz. Ct. App. 1978). · cites it 14× “During that period of employment she received $2,461.”
Pena v. Indus. Com'n of Arizona, 683 P.2d 309 (Ariz. Ct. App. 1984). · cites it 11× “Every employee of an employer within the provisions of this chapter who is injured by accident arising out of and in the course of employment, or his dependents in event of his death, shall receive the compensation fixed in this chapter on the basis of such employee’s average…”
Fletcher v. Indus. Comm'n, 587 P.2d 757 (Ariz. Ct. App. 1978). · cites it 11× “The question before us concerns the applicability of A.R.S. § 23-1041(0) and the cases interpreting that provision.”
Rowland v. Great States Ins., 20 P.3d 1158 (Ariz. Ct. App. 2001). · cites it 3× “Although that definition is less than illuminating, “compensation” generally refers to lost wages and lost earning capacity, see A.R.S. § 23-1041, and “benefits” refers to “medical, surgical and hospital benefits or other treatment, nursing, medicine, surgical supplies, crutches…”
Powell v. Indus. Comm'n, 451 P.2d 37 (Ariz. 1969). · cites it 12× “This Court granted the respondent’s petition for review in order that we might further examine the question of the computation of “average monthly wage under A.R.S. § 23-1041, as amended;” namely, whether the petitioner’s wage should be determined by the use of the 12-month…”
Wozniak v. Indus. Comm'n, 359 P.3d 1014 (Ariz. Ct. App. 2015). · cites it 13× “¶ 10 Determining a claimant’s average monthly wage is governed by A.R.S. § 23-1041, which provides in pertinent part: A.”
Mail Boxes v. Indus. Comm'n, 888 P.2d 777 (Ariz. 1995). · cites it 3× “The basis for computing premium payments and compensation benefits for the sole proprietor shall be an assumed average monthly wage of not less than six hundred dollars nor more than the maximum wage provided by § 23-1041 and is subject to the discretionary approval of the…”
Schmitz v. Indus. Comm'n, 549 P.2d 184 (Ariz. Ct. App. 1976). · cites it 19× “However, the Industrial Commission, in computing the workman's pre-injury average monthly wage is required to, and did in this case, apply A.R.S. § 23-1041 E which establishes a maximum ceiling for average monthly wage determinations.”
— Ariz. Rev. Stat. § 23-1041(0) — 1 case
Fletcher v. Indus. Comm'n, 587 P.2d 757 (Ariz. Ct. App. 1978). “The question before us concerns the applicability of A.R.S. § 23-1041(0) and the cases interpreting that provision.”
— Ariz. Rev. Stat. § 23-1041(A) — 16 cases
Wiley v. Indus. Com'n of Arizona, 847 P.2d 595 (Ariz. 1993). “es from concurrent “dissimilar” employment be overruled? Essentially, the issue before us is whether Wiley’s total wages from his various jobs should be aggregated in computing his average monthly wage (and thus in determining his lost earning capacity and resulting…”
Cnty. of Maricopa v. Indus. Comm'n of Arizona, 699 P.2d 389 (Ariz. Ct. App. 1985). “While I agree with the majority on the jurisdictional and medical proof issues, I disagree with them on the double recovery issue.”
Scott v. Indus. Comm'n, 593 P.2d 919 (Ariz. Ct. App. 1978). “During that period of employment she received $2,461.”
Reavis v. Indus. Comm'n, 995 P.2d 716 (Ariz. Ct. App. 1999).
Pena v. Indus. Com'n of Arizona, 683 P.2d 309 (Ariz. Ct. App. 1984). “Every employee of an employer within the provisions of this chapter who is injured by accident arising out of and in the course of employment, or his dependents in event of his death, shall receive the compensation fixed in this chapter on the basis of such employee’s average…”
— Ariz. Rev. Stat. § 23-1041(B) — 11 cases
Wiley v. Indus. Com'n of Arizona, 847 P.2d 595 (Ariz. 1993). “es from concurrent “dissimilar” employment be overruled? Essentially, the issue before us is whether Wiley’s total wages from his various jobs should be aggregated in computing his average monthly wage (and thus in determining his lost earning capacity and resulting…”
Pena v. Indus. Com'n of Arizona, 683 P.2d 309 (Ariz. Ct. App. 1984). “Every employee of an employer within the provisions of this chapter who is injured by accident arising out of and in the course of employment, or his dependents in event of his death, shall receive the compensation fixed in this chapter on the basis of such employee’s average…”
Mail Boxes v. Indus. Comm'n, 888 P.2d 777 (Ariz. 1995). “The basis for computing premium payments and compensation benefits for the sole proprietor shall be an assumed average monthly wage of not less than six hundred dollars nor more than the maximum wage provided by § 23-1041 and is subject to the discretionary approval of the…”
Gamez v. Indus. Com'n of Arizona, 141 P.3d 794 (Ariz. Ct. App. 2006).
Bratz v. Indus. Comm'n, 873 P.2d 697 (Ariz. Ct. App. 1994).
— Ariz. Rev. Stat. § 23-1041(C) — 2 cases
Fletcher v. Indus. Comm'n, 587 P.2d 757 (Ariz. Ct. App. 1978). “The question before us concerns the applicability of A.R.S. § 23-1041(0) and the cases interpreting that provision.”
Wozniak v. Indus. Comm'n, 359 P.3d 1014 (Ariz. Ct. App. 2015). “¶ 10 Determining a claimant’s average monthly wage is governed by A.R.S. § 23-1041, which provides in pertinent part: A.”
— Ariz. Rev. Stat. § 23-1041(D) — 6 cases
Senor T's Restaurant v. Indus. Comm'n, 641 P.2d 848 (Ariz. 1982). “Prior to the Scott decision, the Court of Appeals had construed A.R.S. § 23-1041 as excluding tips from the definition of "monthly wage.”
Wiley v. Indus. Com'n of Arizona, 847 P.2d 595 (Ariz. 1993). “es from concurrent “dissimilar” employment be overruled? Essentially, the issue before us is whether Wiley’s total wages from his various jobs should be aggregated in computing his average monthly wage (and thus in determining his lost earning capacity and resulting…”
Elco Veterinary Supply v. Indus. Comm'n, 668 P.2d 889 (Ariz. Ct. App. 1983).
Carr v. Indus. Comm'n, 3 P.3d 1084 (Ariz. Ct. App. 1999).
Lazarus v. Indus. Comm'n, 947 P.2d 875 (Ariz. Ct. App. 1997).
— Ariz. Rev. Stat. § 23-1041(D)(4) — 1 case
Warren v. Indus. Comm'n, 39 P.3d 534 (Ariz. Ct. App. 2002).
— Ariz. Rev. Stat. § 23-1041(E) — 11 cases
McPeak v. Indus. Comm'n, 741 P.2d 699 (Ariz. Ct. App. 1987). “The claimant asserts that A.R.S. § 23-1041, which dictates the maximum average monthly wage, violates Art.”
Wiedmaier v. Indus. Comm'n, 589 P.2d 1 (Ariz. 1978).
Wiley v. Indus. Com'n of Arizona, 847 P.2d 595 (Ariz. 1993). “es from concurrent “dissimilar” employment be overruled? Essentially, the issue before us is whether Wiley’s total wages from his various jobs should be aggregated in computing his average monthly wage (and thus in determining his lost earning capacity and resulting…”
Reavis v. Indus. Comm'n, 995 P.2d 716 (Ariz. Ct. App. 1999).
W.F. Dunn, Sr. & Son v. Indus. Comm'n, 773 P.2d 241 (Ariz. Ct. App. 1989).
— Ariz. Rev. Stat. § 23-1041(E)(1) — 1 case
AJ Goulder Elec. v. INDUS. COM'N, 928 P.2d 687 (Ariz. Ct. App. 1996).
— Ariz. Rev. Stat. § 23-1041(E)(2) — 1 case
Special Fund Div. v. Arizona Dep't of Transp., 8 P.3d 412 (Ariz. Ct. App. 2000).
— Ariz. Rev. Stat. § 23-1041(E)(4) — 3 cases
Reavis v. Indus. Comm'n, 995 P.2d 716 (Ariz. Ct. App. 1999).
A.J. Goulder Elec. v. Indus. Comm'n, 928 P.2d 687 (Ariz. Ct. App. 1996).
AJ Goulder Elec. v. INDUS. COM'N, 928 P.2d 687 (Ariz. Ct. App. 1996).
— Ariz. Rev. Stat. § 23-1041(E)(b) — 1 case
Reavis v. Indus. Comm'n, 995 P.2d 716 (Ariz. Ct. App. 1999).
— Ariz. Rev. Stat. § 23-1041(E)(l) — 1 case
A.J. Goulder Elec. v. Indus. Comm'n, 928 P.2d 687 (Ariz. Ct. App. 1996).
— Ariz. Rev. Stat. § 23-1041(F) — 1 case
Parra v. Pedus, Transcontinental Ins. Co., 141 P.3d 745 (Ariz. Ct. App. 2006).
— Ariz. Rev. Stat. § 23-1041(G) — 4 cases
Berryhill v. Indus. Comm'n, 307 P.3d 1030 (Ariz. Ct. App. 2013).
Storey v. mesa/york (Ariz. Ct. App. 2017).
Douglas v. montecito/Saf. (Ariz. Ct. App. 2025).
Cantrell v. kroger/kroger (Ariz. Ct. App. 2025).
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