Short-Term Disability Income Gap Calculator
Example: Monthly income: 6000 $ · Short-term disability income replacement %: 60 % · Weeks out of work: 8 · Elimination/waiting period (weeks): 1
| Income you would lose | $5,262 |
| Income replaced by coverage | $5,815 |
| Your weekly income | $1,385 |
Worked example
Suppose you earn $6,000 a month, your short-term disability policy replaces 60% of income, you expect to be out for 8 weeks, and there is a 1-week waiting period. Your weekly income is about $1,385 ($6,000 times 12, divided by 52 weeks). You are paid nothing for the first week, so only 7 weeks are covered at 60%, replacing about $5,815. Over the full 8 weeks your normal pay would have been about $11,077, so you still lose roughly $5,262. That gap is the cash you would need on hand to get through the leave.
Frequently asked questions
What is the elimination or waiting period?
It is the number of days or weeks at the start of a disability during which the policy pays nothing, similar to a deductible measured in time. Common periods run from zero to two weeks for short-term disability. A shorter waiting period costs more in premium but shrinks the unpaid gap this tool calculates.
How much of my income does short-term disability replace?
Typical employer policies replace 50% to 70% of your base pay, often up to a weekly dollar cap. Enter your actual replacement percentage from your policy documents. If there is a weekly maximum below your normal pay, your effective replacement can be lower than the stated percentage.
Is short-term disability income taxable?
The tax treatment turns on who paid the premiums. If your employer paid with pre-tax dollars, the benefits are generally taxable; if you paid the premium with after-tax dollars, benefits are usually tax-free. This calculator shows gross amounts, so factor in taxes when sizing your emergency fund.
Does this cover long-term disability too?
No. This tool models a short medical leave under short-term disability, which usually lasts a few weeks to a few months. A disability that stretches beyond that would move to long-term disability coverage, which has its own separate waiting period and replacement percentage.
How big should my emergency fund be for a leave?
At minimum, enough to cover the income-lost figure this tool produces plus your ongoing fixed expenses during the leave. Because leaves can run longer than expected, many planners suggest a cushion beyond the single-scenario gap. Run the tool with a longer 'weeks out' to stress-test a worse case.