A methodology for numerical prediction of accumulated rail damage in railway turnouts is presented. Based on simulation of dynamic vehicle-track interaction followed by a discretisation of the conditions in each wheel-rail contact, distributions of rail wear are calculated by the Archard model of sliding wear, while surface initiated rolling contact fatigue (RCF) damage is evaluated by the Palmgren–Miner rule and an index building on shakedown theory. Partial slip in the wheel-rail contacts and variable amplitude loading are considered. For freight traffic in the diverging route, the influence of rail inclination and switch rail elevation on damage in the switch panel is investigated in a demonstration example. Two-point contact situations with one contact on the switch rail and one on top of the stock rail induce relative motion and slip between wheel and rail leading to high energy dissipation. In agreement with field observations, it is concluded that wear is the dominating damage mechanism on the gauge side of the switch rail while the risk for RCF is higher on the crowns of the switch and stock rails. For accurate prediction of rail life for given combinations of wheel/rail materials and traffic conditions, the methodology needs to be calibrated by field measurements.