The Railroad Retirement Board (RRB) announced this month that the amounts of compensation subject to Railroad Retirement Tier I and Tier II payroll taxes will increase in 2026, while the tax rates on employers and employees will stay the same. The Tier I tax rate on covered rail employers and employees remains at 7.65 percent (6.20 percent for railroad retirement and 1.45 percent for Medicare). The maximum amount of employee earnings subject to the 6.20 rate will increase from $176,100 in 2025 to $184,500 in 2026. The Tier II tax rates will remain the same in 2026: 4.9 percent for employees and 13.1 percent for employers. The maximum amount of earnings subject to railroad retirement Tier II taxes in 2026 will increase from $130,800 in 2025 to $137,100 in 2026.
Additionally, the Centers for Medicare & Medicaid Services (CMS) has announced that the standard monthly Part B premium will increase from $185.00 in 2025 to $202.90 in 2026. However, some Medicare beneficiaries may pay less than this amount because, by law, Part B premiums for current enrollees cannot increase by more than the amount of the cost-of-living adjustment for Social Security (railroad retirement tier I) benefits. The annual deductible for all Medicare Part B enrollees in 2026 will be $283, an increase of $26 from the 2025 deductible of $257. The increases are due to changes in both pricing and utilization that are consistent with historical trends. For more information regarding this increase, please visit the Railroad Retirement Board website.