Method for determining the base
The formula for determining the OASDI contribution and benefit base is set by law. The formula is applicable only if a cost-of-living increase becomes effective for December of the year in which a determination of the base would ordinarily be made. Because there is a cost-of-living increase for December 2019, the formula is applicable. The formula states that the base for any year Y after 1994 is equal to the 1994 base of \$60,600 multiplied by the ratio of the national average wage index for year (Y-2) to that for 1992, with the result rounded to the nearest multiple of \$300. If the result is less than the current base, the base is not reduced.

Base for 2020
Under the above formula, the base for 2020 shall be the 1994 base of \$60,600 multiplied by the ratio of the national average wage index for 2018 to that for 1992, or, if larger, the 2019 base of \$132,900. If the amount so determined is not a multiple of \$300, it is rounded to the nearest multiple of \$300.

Amounts informula Computation 1994 base \$60,600 1992 average wage index 22,935.42 2018 average wage index 52,145.80 \$60,600 times 52,145.80 divided by 22,935.42 equals \$137,779.71, which rounds to \$137,700 \$137,700 exceeds the base for 2019, so the base for 2020 is \$137,700