Automatic Increases
Contribution & Benefit Base
Wage-indexed Amounts
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Method for determining the base
The formula for determining the OASDI contribution
and benefit base is set by law. 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 2008
Under the above formula, the base for 2008 shall be the 1994 base of $60,600
multiplied by the ratio of the national average wage index for 2006 to
that for 1992, or, if larger, the 2007 base of $97,500.
If the amount so determined is not a multiple of $300, it is rounded to the
nearest multiple of $300.
Calculation details
Amounts in
formula |
1994 base | $60,600 |
| 1992 average wage index | $22,935.42 |
| 2006 average wage index | $38,651.41 |
| Computation | $60,600 times $38,651.41 divided by
$22,935.42 equals $102,124.81, which rounds to
$102,000. |
| Higher amount | $102,000 exceeds
$97,500, so the base for 2008 is
$102,000 |
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