{
  "slug": "long-term-disability-benefit-calculator",
  "title": "Long-Term Disability Benefit Calculator",
  "heading": "Long-Term Disability Benefit Calculator",
  "category": "financial",
  "url": "https://www.revenuelab.fyi/toolbox/long-term-disability-benefit-calculator",
  "summary": "What a group LTD policy actually pays after offsets, caps, and taxes.",
  "description": "A group long-term disability plan advertised as replacing 60% of income rarely pays 60% of your paycheck. Three things shrink it: a monthly dollar cap that binds at higher salaries, offsets that subtract Social Security disability, workers' compensation, and other benefits from the plan's payment, and tax treatment — if your employer paid the premium, the benefit is taxable income, while premiums you paid with after-tax dollars produce a tax-free benefit. This calculator applies the replacement percentage, enforces the monthly maximum, subtracts offsets, and then applies tax to produce a realistic monthly and annual net. It also shows the gap against your current take-home so you can size an individual supplemental policy or an emergency fund. Check your certificate of coverage for the exact definition of disability, the elimination period, and whether benefits run to age 65 or for a fixed number of years.",
  "formula": "Benefit = min(Monthly Salary × Replacement %, Monthly Cap) − Offsets. Net = Benefit × (1 − Tax Rate if employer-paid).",
  "dateModified": "2026-09-06",
  "run_url": "https://www.revenuelab.fyi/api/public/calc?tool=long-term-disability-benefit-calculator",
  "inputs": [
    {
      "id": "salary",
      "label": "Annual salary",
      "kind": "number",
      "hint": null,
      "default": 110000,
      "unit": "$",
      "min": 15000,
      "max": 1000000
    },
    {
      "id": "replacePct",
      "label": "Plan replacement rate",
      "kind": "number",
      "hint": null,
      "default": 60,
      "unit": "%",
      "min": 30,
      "max": 80
    },
    {
      "id": "cap",
      "label": "Monthly benefit cap",
      "kind": "number",
      "hint": null,
      "default": 8000,
      "unit": "$",
      "min": 500,
      "max": 30000
    },
    {
      "id": "offsets",
      "label": "Monthly offsets (SSDI, workers' comp)",
      "kind": "number",
      "hint": null,
      "default": 1500,
      "unit": "$",
      "min": 0,
      "max": 10000
    },
    {
      "id": "taxable",
      "label": "Who paid the premium?",
      "kind": "select",
      "hint": null,
      "default": "employer",
      "options": [
        {
          "value": "employer",
          "label": "Employer — benefit is taxable"
        },
        {
          "value": "employee",
          "label": "I paid after-tax — benefit is tax-free"
        }
      ]
    },
    {
      "id": "taxRate",
      "label": "Effective tax rate",
      "kind": "number",
      "hint": null,
      "default": 22,
      "unit": "%",
      "min": 0,
      "max": 50
    },
    {
      "id": "elimination",
      "label": "Elimination period",
      "kind": "number",
      "hint": null,
      "default": 90,
      "unit": "days",
      "min": 0,
      "max": 365
    }
  ],
  "outputs": [
    {
      "id": "net",
      "label": "Net monthly benefit",
      "format": "currency",
      "hint": null,
      "primary": true
    },
    {
      "id": "gross",
      "label": "Gross benefit after offsets",
      "format": "currency",
      "hint": null,
      "primary": false
    },
    {
      "id": "effectiveReplacement",
      "label": "Real replacement of take-home",
      "format": "percent",
      "hint": null,
      "primary": false
    },
    {
      "id": "gap",
      "label": "Monthly income gap",
      "format": "currency",
      "hint": null,
      "primary": false
    },
    {
      "id": "bridgeNeeded",
      "label": "Savings needed for elimination period",
      "format": "currency",
      "hint": null,
      "primary": false
    }
  ],
  "worked_example": {
    "inputs": [
      "Annual salary: 110000 $",
      "Plan replacement rate: 60 %",
      "Monthly benefit cap: 8000 $",
      "Monthly offsets (SSDI, workers' comp): 1500 $",
      "Who paid the premium?: Employer — benefit is taxable",
      "Effective tax rate: 22 %",
      "Elimination period: 90 days"
    ],
    "outputs": [
      "Net monthly benefit: $3,120",
      "Gross benefit after offsets: $4,000",
      "Real replacement of take-home: 43.6%",
      "Monthly income gap: $4,030",
      "Savings needed for elimination period: $21,450"
    ]
  },
  "how_to": {
    "title": "How to use this",
    "steps": [
      "Enter annual salary ($).",
      "Enter plan replacement rate (%).",
      "Enter monthly benefit cap ($).",
      "Enter monthly offsets (ssdi, workers' comp) ($).",
      "Enter who paid the premium?.",
      "Enter effective tax rate (%).",
      "Enter elimination period (days).",
      "Read your net monthly benefit on the right — it updates as you type.",
      "Hit Share to keep the scenario or send it to someone."
    ]
  },
  "scenarios": [
    {
      "name": "Conservative",
      "description": "Lower-end numbers — what if things land soft?",
      "values": {
        "salary": 66000,
        "replacePct": 35,
        "cap": 4750,
        "offsets": 900,
        "taxable": "employer",
        "taxRate": 13,
        "elimination": 60
      }
    },
    {
      "name": "Typical",
      "description": "Defaults — the most common real-world setup.",
      "values": {
        "salary": 110000,
        "replacePct": 60,
        "cap": 8000,
        "offsets": 1500,
        "taxable": "employer",
        "taxRate": 22,
        "elimination": 90
      }
    },
    {
      "name": "Ambitious",
      "description": "Higher-end numbers — what if things really pop?",
      "values": {
        "salary": 176000,
        "replacePct": 80,
        "cap": 12750,
        "offsets": 2400,
        "taxable": "employer",
        "taxRate": 35,
        "elimination": 150
      }
    }
  ],
  "limitations": [
    "Results are estimates before tax, fees, and inflation unless an input explicitly covers them.",
    "Rates are treated as fixed for the whole period — variable-rate products will drift from this projection.",
    "This is educational maths, not financial advice. Check anything contractual with the lender or your accountant."
  ],
  "faq": [
    {
      "q": "What is an elimination period?",
      "a": "The waiting time between the disability starting and the first LTD payment, commonly 90 or 180 days. Short-term disability or savings has to cover that gap, which is what the bridge figure estimates."
    },
    {
      "q": "Why are offsets subtracted?",
      "a": "Group LTD contracts are usually written to top you up to the replacement percentage from all sources combined, so approved Social Security disability generally reduces the insurer's payment dollar for dollar rather than adding to it."
    },
    {
      "q": "Should I pay the premium myself?",
      "a": "If your employer offers the choice, paying with after-tax dollars typically costs a little now and makes the entire benefit tax-free later, which is usually the better trade at higher incomes."
    },
    {
      "q": "Does 'own occupation' matter?",
      "a": "Substantially. Own-occupation definitions pay if you cannot perform your specific job; any-occupation definitions stop paying once you could do any reasonable work. Many plans switch definition after 24 months."
    }
  ],
  "related": [
    "https://www.revenuelab.fyi/toolbox/ssdi-back-pay-calculator",
    "https://www.revenuelab.fyi/toolbox/life-insurance-coverage-calculator"
  ],
  "license": "CC-BY-4.0",
  "citation": "RevenueLab — Long-Term Disability Benefit Calculator (https://www.revenuelab.fyi/toolbox/long-term-disability-benefit-calculator)"
}