RRSP Contribution Limit in Canada

You want to understand the RRSP contribution limit in Canada and make the most of it for your taxes and investments. In this guide, we simply explain how the limit is set, how to calculate your contribution room, and how to avoid penalties if you overcontribute. This content aims to clarify the contribution rules and help you plan your contributions up to the year 2026.

The Registered Retirement Savings Plan (RRSP) is a savings tool designed to prepare for your retirement. It allows you to set aside money tax-free, while reducing your taxable income and increasing your chances of getting a tax refund. Each year, you can make contributions according to your RRSP contribution room.

The benefits of an RRSP are varied:

• Tax-sheltered growth: your investments grow without being taxed immediately.
• Immediate tax deduction: your contributions are deductible from your income, which can generate a tax refund.
• Carry forward deductions: if you cannot use all your deductions now, you can carry them forward to future years.
• Wide choice of investments: stocks, bonds, exchange-traded funds (ETFs), mutual funds, and more.
• Special tax-free withdrawals: for a first home purchase (HBP) or for education (LLP), you can withdraw funds without paying tax.

There are four main types of RRSPs: individual, spousal, group, and self-directed. Each offers options tailored to your savings and tax planning needs.

You can open and contribute to multiple RRSPs, for example, an individual RRSP in addition to a spousal RRSP. However, the total contributions must never exceed your RRSP contribution room for the year.

This flexibility allows you to allocate your contributions according to your financial goals and fully benefit from the tax advantages of the RRSP.

You can contribute to your RRSP up to the first 60 days of the following year for your contributions to apply to the previous year.

For 2025, the RRSP contribution deadline is March 2, 2026. This means you can still make your 2025 contributions before this date and benefit from the tax advantages.

For 2026, you can contribute to your RRSP up to the first 60 days of 2027, according to your RRSP contribution room.

It is important to respect these deadlines to maximize your tax deductions and avoid any delays or penalties. You can plan your contributions in advance or adjust your payments according to your financial situation and savings goals.

The maximum RRSP contribution corresponds to 18% of your eligible income from the previous year, up to the RRSP contribution limit set by the Canada Revenue Agency (CRA).

To this amount, you can add your unused contribution room from previous years. This allows you to maximize your contributions and tax benefits.

However, certain situations can reduce your contribution room:

• Excess contributions already made.
• Contributions to an employer-sponsored pension plan, which are adjusted according to the pension adjustment.

By planning your contributions and taking these elements into account, you avoid penalties and optimize your tax savings.

If you do not contribute to your RRSP, or if you do not contribute your full contribution room, these are carried forward to subsequent years. This is called unused RRSP contribution room.

You can use them later, for example, when your marginal tax rate is higher. This allows you to maximize your tax benefits and plan your contributions according to your financial situation.

Thus, even if you do not contribute the maximum each year, your contribution room remains available and can be used strategically to reduce your future taxes.

It is possible to contribute more than your RRSP contribution room, but the penalty-free limit is $2,000.

If you exceed this amount, a penalty of 1% per month applies to the surplus, until the excess amount is withdrawn from your RRSP.

It is therefore important to track your contributions to avoid unnecessary fees and plan your payments based on your contribution room and tax needs.

You must convert your RRSP to an RRIF (Registered Retirement Income Fund) by December 31 of the year you turn 71. Your funds remain invested and continue to grow tax-free, except for the minimum withdrawals required by the government, which will be taxable.

If your spouse is under 71, you can continue to contribute to their RRSP through a spousal RRSP, which allows you to maximize your tax savings and plan your withdrawals effectively.

You can contribute to your spouse’s RRSP (married or common-law partner) using your own RRSP contribution room. The funds belong to your spouse, but you benefit from the tax deduction.

This approach is also a financial planning strategy, particularly for income splitting in retirement, which can reduce the couple’s overall tax and optimize your tax savings.

For example, if your eligible income for 2025 was $180,000:

• 18% of $180,000 = $32,400
• RRSP Limit 2026 = $33,810

Thus, your contribution room for 2026 is $32,400, because 18% of your 2025 income is lower than the limit set by the CRA for 2026. However, your unused contribution room and other factors may increase your deductible maximum.

To find out your RRSP contribution room, consult your most recent Notice of Assessment provided by the CRA.

You can also check this information online in “My Account for Individuals” on the Canada Revenue Agency website (CRA).

These sources allow you to know your exact limit and avoid excess contributions, while planning your contributions optimally.

In summary, the RRSP contribution limit in Canada depends on your income, your unused contribution room, and the annual limit set by the government. Understanding these rules helps you maximize your tax savings while avoiding costly penalties. In addition, your unused contribution room can be carried forward to future years. To find out your exact limit, consult your Notice of Assessment or the My Account service of the CRA.