Arizona Workers' Comp Settlements

How Workers' Comp Works in Arizona

Arizona's workers' compensation system is administered by the Industrial Commission of Arizona (ICA). If you're hurt on the job, you're generally entitled to medical care for the injury, wage-replacement benefits while you can't work, and — if the injury leaves a lasting impairment — a permanent disability award or settlement. One thing that sets Arizona apart is that benefits are calculated on a monthly basis around your "average monthly wage," rather than the weekly figures used in many other states. Here's what that looks like in plain terms, with the figures that apply to 2026 injuries.

Temporary Disability: What You're Paid While You Heal

While a work injury keeps you off the job, Arizona pays temporary total disability (TTD) at two-thirds (66.67%) of your average monthly wage. That wage is capped by a statutory maximum average monthly wage that the ICA resets every year. For injuries occurring in 2026, the maximum average monthly wage is $6,131.00 per month, which limits the wage figure used to compute your benefit. Arizona uses a seven-day waiting period before time-loss benefits begin — but if your disability lasts 14 days or more, those first seven days are paid back to you retroactively.

Permanent Disability and Settlements

Once your treating doctor decides your condition is "stationary" (Arizona's term for maximum medical improvement) and you're left with lasting effects, the claim moves to the permanent disability stage. Arizona separates these into two categories that drive how an award or settlement is valued:

• Scheduled injuries — losses to specific body parts (an arm, leg, hand, eye, etc.) pay a set number of months of benefits under a statutory schedule.
• Unscheduled injuries — injuries to the back, neck, or whole body are paid based on your loss of earning capacity — how much the injury reduces what you can now earn.

Many Arizona claims close through a negotiated lump-sum settlement, but unlike some states, settlements that affect future benefits generally require ICA approval. Whether a lump sum is right for you depends on your impairment rating, your future medical needs, and your loss of earning capacity.

The Doctor Question (Arizona Gives You More Choice)

Here's a notable Arizona quirk: in most cases you have the right to choose your own treating doctor. The main exception is when your employer is self-insured and has contracted medical care that the ICA has approved — in that situation your treatment may be directed within that arrangement. Your employer's insurer is also allowed a one-time opportunity to schedule you for an exam with a doctor it chooses. Because the treating doctor's opinion shapes your impairment rating and your benefits, getting medical care documented correctly early matters.

Deadlines You Can't Miss

Report your injury to your employer as soon as possible — once you do, the employer has 10 days to file its report of injury with the ICA. Separately, you generally must file your own claim within one year of the injury, or of when you knew or should have known the condition was work-related (A.R.S. §23-1061). Waiting is risky: miss the one-year deadline and you can lose your right to benefits entirely.

Frequently Asked Questions