Is there a relationship between Social Security base and retirement pay?

There is a correlation between the social security base and an employee's retirement pay. This is because the higher the social security contribution base and the longer the contribution period, the more the retirement salary will be.

Retirement pensions are made up of a base pension and a personal account pension. The basic pension = the average monthly salary of on-the-job workers in the previous year in the province × (1 + the average contribution index of the person) ÷ 2 × the number of years of contribution × 1%; the individual account pension = the accumulated savings in the individual account ÷ the number of months of payment.

And the higher the base for social security contributions, the more the individual will pay, and the more the accumulated savings in the individual account will naturally be at the time of retirement, so the retirement salary will naturally be more.

Taking the personal contribution rate of 8% as an example, if the social security contribution base is 3,000, then the monthly fee to be paid by the individual employee is: 3,000 x 8% = 240 yuan; and if the social security contribution base is 5,000, then the monthly fee to be paid by the individual employee is: 5,000 x 8% = 400 yuan.

In addition, the social security base also affects the average contribution index of the person, this value is an important parameter in the formula for calculating the basic pension, so it also affects the amount of the future retirement salary