Making RRSP contributions

Your RRSP contributions are tax deductible. That means you can claim them as a tax deduction when you file your income tax return — and lower the tax you pay.

How much you can contribute each year

There are limits on how much you can contribute each year to your own RRSPs and your spouse’s RRSPs. Your total contribution roomContribution room The amount you can put into a savings plan like a Registered Retirement Savings Plan (RRSP). If you do not put the full amount into the plan each year, you will have extra, unused contribution room that you can use in later years. Example: Let’s say you can contribute $12,000 to your RRSP this year,…+ read full definition for the year is the lower of:

  • 18% of your earned income for the previous year, or
  • the maximum contributionContribution Money that you put into a savings or investment plan.+ read full definition amount for taxTax A fee the government charges on income, property, and sales. The money goes to finance government programs and other costs.+ read full definition year 2022: $29, 210.

If you are a member of a pensionPension A steady income you get after you retire. Some pensions pay you a fixed amount for life. Others save up money for you while you are working. You use that money to create income after you retire.+ read full definition plan, your pension adjustment will reduce the amount you can contribute to your RRSPRRSP See Registered Retirement Savings Plan.+ read full definition.

Where to find your RRSP deduction limitDeduction limit The most you can deduct for your RRSP contribution on your income tax return. Any money that you put into a pension plan at work counts as part of your RRSP contribution.+ read full definition

You can find your RRSP deduction limit on your most recent Notice of Assessment from the Canada Revenue Agency (CRA). You receive this Notice of Assessment after you file your tax return. You can also view your deduction limit online if you register for CRA’s My Account.

Be aware of the contribution deadline

You have 60 days after the end of the year (usually until March 1, or February 29 in a leap year) to make your RRSP contribution for the previous year. For the 2021 tax year, March 1, 2022 is the deadline.

Build your savings faster by making your contributions early in the year.

Carrying forward unused contribution room

If you don’t have the money to contribute to your RRSP this year, you can carry forward your contribution room indefinitely to future years. This unused contribution room will be taken into accountAccount An agreement you make with a financial institution to handle your money. You can set up an account for depositing and withdrawing, earning interest, borrowing, investing, etc.+ read full definition on your RRSP Deduction Limit Statement, which you can find on your most recent Notice of Assessment or on CRA’s My Account.

Example – Your contribution room was $15,000 in 2016 but you didn’t make an RRSP contribution. You carry this forward to 2017. If your 2017 contribution room is $26,010 (the maximum amount) you can make total RRSP contributions of $41,010 ($15,000 + $26,010) in 2017.

Thinking about borrowing to make an RRSP contribution?

Make sure you can afford to make the loan payments and plan to pay back the loan right away. Consider using your tax refund to help pay down the loan. Interest charges are not tax-deductible. They can add up and offset the initial benefit of making the RRSP contribution. Learn more about borrowing to invest in an RRSP.

Unused RRSP contributions

You don’t have to deduct an RRSP contribution on your tax return in the same year you make the contribution. You can wait and deduct it in a future year. You may choose to do this if you think your income will be higher in the future, moving you up to a higher tax bracketTax bracket The rate at which you pay tax, based on your income level.+ read full definition. This is called having unused RRSP contributions. Learn more about how it works.

What happens if you over-contribute

In general, you have to pay a tax if your unused RRSP contributions from prior years and your current contributions exceed the RRSP deduction limit shown on your latest Notice of Assessment by more than $2,000. The tax is 1% per month on the excess amount. Learn more about excess RRSP contributions.

If you’re a member of a pension plan

If you’ve already put money into a pension plan, you can’t put as much into an RRSP. Learn how your RRSP contribution room may be affected by participating in a pension plan.

Key point

You can find your RRSP deduction limit on your Notice of Assessment or on CRA’s My Account.

Take action

Use this RRSP calculator to figure out how much you need to save for your retirement.

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