Program United States

Railroad Retirement Board

Letter Office of Programs 

Quality Reporting Service Center Phone: (312) 751-4992 

Email: QRSC@rrb.gov Fax: (312) 751-7123 

Letter No. 2021-01 Date: December 9, 2020 

TO: Certification Registration, Retirement and Unemployment Contact Officials 

SUBJECT: Notice of Annual Rates (2021) 

Please distribute this notice to all individuals within your organization who may need the 

information in connection with their work. 

Creditable and Taxable Compensation 

The 2021 railroad retirement tax rates and maximum compensation bases are as follows: 

 Tax Rate Earnings Base 

Employer Tier I 6.2% $142,800 

Employer Tier II 13.1% $106,200 

Employer Medicare 1.45% No Limit 

Employee Tier I 6.2% $142,800 

Employee Tier II 4.9% $106,200 

Employee Medicare 1.45% No Limit 

Railroad Unemployment Insurance Variable $1,710 

Railroad Unemployment Insurance Maximum None $2,209 

The Tier II tax rates are determined annually from a tax rate schedule based on an average account 

benefits ratio reflecting railroad retirement fund levels. Employer tax rates can range from 8.2 

percent to 22.1 percent. Employee tax rates can range from 0 percent to 4.9 percent. 

Additional Medicare Tax: Beginning in 2013, employees will pay an additional 0.9 percent on 

earnings above $200,000 (for those who file an individual return) or $250,000 (for those who file 

a joint return). This additional HI tax rate is not reflected in the tax rates shown above. For 

additional information, contact the Internal Revenue Service. 

Experience Rating 

In October 2020, each employer was sent a notice of their 2021 Railroad Unemployment Insurance 

Act (RUIA) contribution rate. If you have not received your notice, please contact the Quality 

Reporting Service Center. 
	 	

Retirement and Survivor Benefits 

Exempt Amounts for Annual Earnings Test for Less Than Full Retirement Age Annuitants: 

In 2021, the annual exempt amount for less than full retirement age annuitants is $18,960. The 

monthly exempt amount for the first year of retirement in 2021 is $1,580. 

Exempt Amounts for Annual Earnings Test for Full Retirement Age Annuitants: In 2021, 

the annual exempt amount for full retirement age annuitants is $50,520. The monthly exempt 

amount for the first year of retirement in 2021 is $4,210. 

Cost-of-living: Annuitants will receive a cost-of-living increase effective January 2021. Tier I will 

increase 1.3%, and Tier II will increase by 0.4%. This increase is before any adjustment for other 

benefits. 

Unemployment and Sickness Benefits 

Maximum Daily Benefit Rate: Under the Railroad Unemployment Insurance Act (RUIA), the 

maximum daily benefit rate is equal to 5 percent of the monthly RUIA compensation base, rounded 

down to the nearest multiple of $1.00. For days of unemployment and sickness in registration 

periods beginning on and after July 1, 2021, the maximum daily rate is $82.00. The maximum rate 

for registration periods beginning on or after July 1, 2022, is $85.00. 

Monthly Compensation Base: The monthly compensation base under the Railroad 

Unemployment Insurance Act for calendar year 2021 is $1,710.00. 

Qualifying Base Year Compensation: The amount of base year compensation required in 2021 

to qualify for benefits in the benefit year beginning July 1, 2022, is $4,275.00. 

Compensation of $4,275.00 is also the amount of creditable compensation required to end a 

voluntary leaving of work disqualification period in months in calendar year 2021. In addition, 

remuneration earned in calendar year 2021 from employment covered under the Act cannot be 

considered subsidiary remuneration if the employee’s base year earnings are less than $4,275.00. 

Maximum Benefits: The monthly amount of base year 2021 compensation that can be counted in 

determining the maximum amount of normal benefits payable to an employee in the benefit year 

beginning July 1, 2022, is $2,209.00. 

Maximum Monthly Compensation Base and the Earnings Test: For unemployment 

registration periods beginning July 1, 2022 and later, no benefits are payable for which the total 

amount of an employee’s earnings and other remuneration from railroad and non-railroad work 

for days in the period exceeds the monthly compensation amount of $1,710. 

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