Contribution & Benefit Base
Year of Coverage
Latest amount & definition
The "old-law" contribution and benefit base for 2024 is $125,100.
This is the base that would have been effective without the enactment of the
1977 amendments to the Social Security Act. The present-law
contribution and benefit base is substantially higher
than the old-law base.
Purpose of the old-law base
The old-law contribution and benefit base is used by:
- the Railroad Retirement program to determine certain tax liabilities
and tier II benefits payable under that program to supplement the tier I
payments which correspond to basic Social Security benefits,
- the Pension Benefit Guaranty Corporation to determine the maximum amount
of pension guaranteed for single-employer plans under the Employee Retirement
Income Security Act,
- Social Security to determine a year of coverage in
computing the special minimum benefit,
- Social Security to determine a year of coverage (acquired whenever earnings
equal or exceed 25 percent of the old-law base for this purpose only) in
computing benefits for persons who are also eligible to receive pensions
based on non-covered employment.
Determination of the old-law contribution and benefit base for 2024
The formula for determining the old-law 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 2023, the formula is
applicable. According to the formula, the old-law contribution and benefit base
for 2024 is determined to be the 1994 old-law base ($45,000) multiplied by the
ratio of the national average wage index for 2022 to
that for 1992, or, if larger, the 2023 old-law base ($118,800). If
the amount so determined is not a multiple of $300, it is rounded to the
nearest multiple of $300.
|1994 old-law base
|1992 average wage index
|2022 average wage index
|$45,000 times 63,795.13 divided by
22,935.42 equals $125,168.01, which rounds to $125,100
|$125,100 exceeds the 2023
old-law base, so the old-law base for 2024 is $125,100