Automatic Determinations

Contribution & Benefit Base

Wage-indexed Amounts

Year of Coverage

Latest amount & definition
The "old-law" contribution and benefit base for 2016 is $88,200. 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 under the Employee Retirement Income Security Act,
  • Social Security to determine a year of coverage in computing the special minimum benefit, and
  • 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 2016
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 no cost-of-living increase for December 2015, there can be no increase in the old-law contribution and benefit base for 2016. Thus the old-law base for next year is the same as this year's base, $88,200.