For Java SE 5: According to Garbage Collector Ergonomics [Oracle]:

initial heap size:

Larger of 1/64th of the machine's physical memory on the machine or some reasonable minimum. Before J2SE 5.0, the default initial heap size was a reasonable minimum, which varies by platform. You can override this default using the -Xms command-line option.

maximum heap size:

Smaller of 1/4th of the physical memory or 1GB. Before J2SE 5.0, the default maximum heap size was 64MB. You can override this default using the -Xmx command-line option.

UPDATE:

As pointed out by Tom Anderson in his comment, the above is for server-class machines. From Ergonomics in the 5.0 JavaTM Virtual Machine:

In the J2SE platform version 5.0 a class of machine referred to as a server-class machine has been defined as a machine with

• 2 or more physical processors
• 2 or more Gbytes of physical memory

with the exception of 32 bit platforms running a version of the Windows operating system. On all other platforms the default values are the same as the default values for version 1.4.2.

In the J2SE platform version 1.4.2 by default the following selections were made

• initial heap size of 4 Mbyte
• maximum heap size of 64 Mbyte

Solved this by adding export _JAVA_OPTIONS=-Xmx1024m to /etc/profile file.

C:\java -X

    -Xmixed           mixed mode execution (default)
    -Xint             interpreted mode execution only
    -Xbootclasspath:<directories and zip/jar files separated by ;>
                      set search path for bootstrap classes and resources
    -Xbootclasspath/a:<directories and zip/jar files separated by ;>
                      append to end of bootstrap class path
    -Xbootclasspath/p:<directories and zip/jar files separated by ;>
                      prepend in front of bootstrap class path
    -Xnoclassgc       disable class garbage collection
    -Xincgc           enable incremental garbage collection
    -Xloggc:<file>    log GC status to a file with time stamps
    -Xbatch           disable background compilation
    -Xms<size>        set initial Java heap size
    -Xmx<size>        set maximum Java heap size
    -Xss<size>        set java thread stack size
    -Xprof            output cpu profiling data
    -Xfuture          enable strictest checks, anticipating future default
    -Xrs              reduce use of OS signals by Java/VM (see documentation)
    -Xcheck:jni       perform additional checks for JNI functions
    -Xshare:off       do not attempt to use shared class data
    -Xshare:auto      use shared class data if possible (default)
    -Xshare:on        require using shared class data, otherwise fail.

The -X options are non-standard and subject to change without notice.

Like you have mentioned, The default -Xmxsize (Maximum HeapSize) depends on your system configuration.

Java8 client takes Larger of 1/64th of your physical memory for your Xmssize (Minimum HeapSize) and Smaller of 1/4th of your physical memory for your -Xmxsize (Maximum HeapSize).

Which means if you have a physical memory of 8GB RAM, you will have Xmssize as Larger of 8*(1/64) and Smaller of -Xmxsizeas 8*(1/4).

You can Check your default HeapSize with

In Windows:

java -XX:+PrintFlagsFinal -version | findstr /i "HeapSize PermSize ThreadStackSize"

In Linux:

java -XX:+PrintFlagsFinal -version | grep -iE 'HeapSize|PermSize|ThreadStackSize'

These default values can also be overrided to your desired amount.

Run the command java -X and you will get a list of all -X options:

C:\Users\Admin>java -X
-Xmixed           mixed mode execution (default)
-Xint             interpreted mode execution only
-Xbootclasspath:<directories and zip/jar files separated by ;>
                      set search path for bootstrap classes and resources
-Xbootclasspath/a:<directories and zip/jar files separated by ;>
                      append to end of bootstrap class path
-Xbootclasspath/p:<directories and zip/jar files separated by ;>
                      prepend in front of bootstrap class path
-Xdiag            show additional diagnostic messages
-Xnoclassgc       disable class garbage collection
-Xincgc           enable incremental garbage collection
-Xloggc:<file>    log GC status to a file with time stamps
-Xbatch           disable background compilation
-Xms<size>        set initial Java heap size.........................
-Xmx<size>        set maximum Java heap size.........................
-Xss<size>        set java thread stack size
-Xprof            output cpu profiling data
-Xfuture          enable strictest checks, anticipating future default
-Xrs              reduce use of OS signals by Java/VM (see documentation)
-Xcheck:jni       perform additional checks for JNI functions
-Xshare:off       do not attempt to use shared class data
-Xshare:auto      use shared class data if possible (default)
-Xshare:on        require using shared class data, otherwise fail.
-XshowSettings    show all settings and continue
-XshowSettings:all         show all settings and continue
-XshowSettings:vm          show all vm related settings and continue
-XshowSettings:properties  show all property settings and continue
-XshowSettings:locale      show all locale related settings and continue

The -X options are non-standard and subject to change without notice.

I hope this will help you understand Xms, Xmx as well as many other things that matters the most. :)