How Does the RRSP Contribution Limit Work?
Contributions to a registered retirement savings plan (RRSP) are tax deductible and offer a great way to build future savings. Each year, your RRSP contribution limit caps at 18% of your previous year’s reported income, up to a maximum limit specified by the government.
By understanding the rules and limits, you can ensure you make the most of the RRSP benefits while avoiding penalty fees.
What is the RRSP contribution limit?
The RRSP contribution limit is a specific amount you’re allowed to contribute to your RRSP each year. It is typically 18% of your total income earned in the previous year, up to an annual maximum limit.
For 2025, the contribution limit is $32,490 (it was $31,560 in 2024), plus any unused contribution amounts from previous years. This combined amount is sometimes called a “contribution room.”
Note that opening a spousal RRSP does not give you additional contribution room. If you add funds to a spousal RRSP in your partner’s name, those contributions count toward the contributor’s overall limit — not the spouse’s limit.
Are RRSP contributions tax-deductible?
Yes. The amount you contribute to your RRSP by the annual deadline can be claimed as a deduction from your taxable income, which means you’ll be taxed on a lower income.
For the 2024 tax year, the RRSP contribution deadline was March 3, 2025.
However, you don’t have to deduct all your RRSP contributions in the same year. You can carry forward any or all unused contributions to future years.
Generally speaking, the more money you make — and the higher your tax bracket — the more beneficial these tax deductions become. If you're not currently paying a high rate of tax, it might be worth saving some or all of your deduction potential for a future year when your income and tax rate are higher.
Even if you use this strategy and defer your deductions, you must still report the total RRSP contribution on your annual tax return.
The Canada Revenue Agency (CRA) will take note of any unused contributions and list the non-deducted amount on your notice of assessment, making it available to carry forward. You can also track these amounts yourself using Schedule 7.
RRSP contribution limit vs. RRSP deduction limit
The RRSP deduction limit is the maximum contribution amount you can claim as a deduction on your tax return.
When are the RRSP contribution limit and the deduction limit the same?
If you deduct all of your RRSP contributions on your tax return, both amounts are the same.
When do the RRSP deduction limit and contribution limit differ?
If you deduct only a portion of your RRSP contributions on your tax return, your deduction limit is lower than your total contribution limit.
Both unused RRSP contributions and contribution deduction amounts can be carried forward into future years.
What happens if I over contribute to my RRSP?
If you contribute more than your limit to your RRSP (or spousal RRSP), you end up making an excess contribution. Excess contributions over $2,000 are taxed at 1% per month on the surplus amount.
However, the tax may be waived if you either:
Withdraw the excess amount before the end of the month in which you made the contribution, or
Contributed the surplus amount to a qualifying group plan.
How to calculate the RRSP contribution limit
Your RRSP contribution limit can be found on your most recent notice of assessment from the CRA. The CRA calculates your deduction limit using the information you provided on your previous tax return.
If there have been any changes since the last assessment, CRA will send you an updated RRSP limit on Form T1028.
You can also log into CRA’s My Account online service to see your RRSP deduction limit on your account overview. It includes any unused contribution room from previous years.
If you prefer, you can call the CRA at 1-800-959-8281 to inquire about your RRSP deduction limit.
RRSP contribution calculator
Find your RRSP contribution limit amount to date.
RRSP historical contribution limits
You can find the new and previous years’ contribution data on CRA’s website.
How do I make an RRSP contribution?
There are two ways you can make RRSP contributions:
In-person: By opening an RRSP at a financial institution’s branch location.
Online: Using online banking to open a new RRSP and transferring funds from your chequing or savings account, or making contributions to an existing account.
Types of RRSP investments
Most banks and credit unions offer a variety of investment options to hold within your RRSP, including:
When considering these options, you might want to get advice from your bank’s investment advisor or a professional financial advisor.
You can contribute a lump sum once a year or set up regular automatic deposits, such as after each paycheque. Either way, be sure your contributions stay within the limits set by the CRA.
What if I can’t afford to max out my RRSP contribution?
That’s perfectly okay. You don’t lose your contribution room if you don’t use the full amount in a given year; any unused amount is automatically carried forward.
For example, let’s say you have $31,560 in contribution room (the 2024 RRSP contribution limit). If you contribute $10,000 before this year’s deadline, the remaining $21,560 will be added to your annual contribution limit for the following year. Your total available contribution room will continue to grow until you either max out your contributions or reach December 31 of the year you turn 71, whichever comes first.
Alternatively, if your financial situation allows, you might consider borrowing money to contribute to your RRSP by taking an RRSP loan.
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Siddhi Bagwe