This paper presents the results of a parametric study undertaken to analyse the influence that changes in the material model and contact zone parameters may have on residual stress levels. A simplified shakedown based mechanical model is used to estimate the residual stress distributions due to simulated contact loads. An information on final shakedown state of the rail subjected to given loading program is obtained at a substantially reduced computational cost compared to the standard incremental analysis. A 50% increase in peak contact pressure may increase the longitudinal residual stress level by over 700%. The dependence of peak residual stresses on changes in the hardening ratio is almost linear, while the dependence of peak residual stresses on changes in the yield limit indicates a quadratic relationship. The research indicates that in future applications, a simplified treatment of the rail/wheel interface is justified, as long as the peak pressure in the contact zone is estimated correctly. The residual stresses in rails induced by service conditions may reach very high values, on a par with the material yield limit. This effect is aggravated by the operating procedure of increasing wheel axle loads.