Various models for simulating rail ratcheting behaviour were developed to study rolling contact fatigue (RCF) damage in rails. However, limitations remain in terms of the accuracy of wheel–rail contact modelling and computational efficiency of the cyclic loading simulation. This study developed an efficient 3D finite element (FE) procedure to simulate ratcheting in rails subjected to numerous load cycles. The procedure simulates a wheel rolling repeatedly over a rail section with updated stress–strain states, enabling automatically executed cyclic loading simulation given a predefined number of cycles. To ensure the accuracy of the contact modelling, the effect of meshing schemes on subsurface stress distribution was examined. In addition, the FE contact model with the selected meshing scheme, which balances accuracy and computational efficiency, was verified against the widely accepted CONTACT program. Subsequently, a non-linear kinematic hardening (NLKH) steel material was used in the FE model for ratcheting simulations with up to 100 wheel-loading cycles. The rail surface and subsurface stress states were replicated under partial-slip wheel–rail rolling contact conditions with traction coefficients of 0.10, 0.20 and 0.35, respectively. The ratcheting behaviour was extensively analysed in terms of plastic deformation, contact patch evolution, and ratcheting rates. The simulated plastic deformation was found to alter the contact geometry and thus contact stresses, which in turn affect further accumulation of plastic deformation and subsequent ratcheting strains. These findings highlighted the importance of considering the interplay between the rail ratcheting behaviour of the rail and evolving contact conditions for predicting ratcheting and RCF damage in rails.