Program United States 

Railroad Retirement Board Letter Office of Programs 

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

e-mail: qrsc@rrb.gov [Fax: (312) 751-7123] 

Letter No. Date: 12/04/2015 

2016-01 

TO: Certification Registration, Retirement and Unemployment Contact Officials 

SUBJECT: Notice of Annual Rates (2016) 

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 2016 railroad retirement tax rates and maximum compensation bases are as follows: 

 Tax Rate Earnings Base 

Employee Tier I 6.2% $118,500 

Medicare 1.45% No Limit 

Employer Tier I 6.2% $118,500 

Medicare 1.45% No Limit 

Employee Tier II 4.9% $88,200 

Employer Tier II 13.1% $88,200 

Railroad Unemployment Insurance Variable $1,455 

Railroad Unemployment Insurance Maximum None $1,879 

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. 

Special Note: 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. 
 

Experience Rating 

In October 2015, each employer was sent a notice of their 2016 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 2016, the annual exempt amount for less than full retirement age annuitants is 

$15,720. The monthly exempt amount for the first year of retirement in 2016 is $1,310. 

Exempt Amounts for Annual Earnings Test for Full Retirement Age Annuitants: In 2016, 

the annual exempt amount for full retirement age annuitants is $41,880. The monthly exempt 

amount for the first year of retirement in 2016 is $3,490. 

No Cost-of-living Increase: Annuitants will not receive a cost-of-living increase in 2016. 

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, 2016, the maximum daily rate is $72.00. The 

maximum rate for registration periods beginning on or after July 1, 2017, is $72.00. 

Monthly Compensation Base: The monthly compensation base under the Railroad 

Unemployment Insurance Act for calendar year 2016 is $1,455. 

Qualifying Base Year Compensation: The amount of base year compensation required in 2016 

to qualify for benefits in the benefit year beginning July 1, 2017, is $3,637.50. 

Compensation of $3,637.50 is also the amount of creditable compensation required to end a 

voluntary leaving of work disqualification period in months in calendar year 2016. In addition, 

remuneration earned in calendar year 2016 from employment covered under the Act cannot be 

considered subsidiary remuneration if the employee’s base year earnings are less than $3,637.50. 

Maximum Benefits: The monthly amount of base year 2016 compensation that can be counted 

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

year beginning July 1, 2017, is $1,879. 

Maximum Monthly Compensation Base and the Earnings Test: For unemployment 

registration periods beginning July 1, 2017 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 $1,455.