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RRSP MPP & DPSP Contribution Limits, Excess Contributions
Who Can Contribute to an RRSP?
RRSP Contribution Room is Based on Earned Income
Maximum Annual RRSP Contribution Limits
RRSP Deduction Room Carried Forward
RRSP Contribution Room at Death
Check Your RRSP Contribution Limit Before Making Contributions!!
Apply to Withdraw an Overcontribution Immediately!
Tax on Excess RRSP Contributions
Are You Required to Pay the RRSP OvercontributionTax?
Note re Home Buyer's Plan and Lifelong Learning Plan
Canada Revenue Agency (CRA) Resources
Who Can Contribute to an RRSP?
Anyone with RRSP contribution room can contribute to an RRSP, up to and including the year that the contributor turns 71 years of age. Contributions can be made to a spousal RRSP up to and including the year that the spouse or common-law partner turns 71 years of age. This maximum age was increased from 69 to 71 by the 2007 Federal budget, giving people an additional two years to contribute.
RRSP Contribution Room is Based on Earned Income
RRSP contribution room is based on "earned income". Generally, earned income includes a taxpayer's income (earned while the taxpayer was resident in Canada) from the following:
 | income from office or employment reported on a T4 slip (line 10100 of the tax return, line 1010 prior to 2019) | ||
|
other employment income (line 10400, line 104 prior to 2019) - this includes foreign
employment income, which must be reported
in Canadian dollars.
| ||
| income (less loss) from a business carried on by the taxpayer, either alone or as a partner actively engaged in the business | ||
| income (less loss) from rental of real property | ||
| royalty income regarding a work or invention of which the taxpayer was the author or inventor | ||
| taxable support payments received | ||
| CPP or provincial disability pension income | ||
| amounts received under a supplementary unemployment benefit plan (not federal Employment Insurance) | ||
| less deductible support payments made |
If the taxpayer was not resident in Canada, but had income from employment performed or a business carried on in Canada, this may also constitute earned income, unless it was exempt from income tax in Canada due to a tax treaty with another country.
Immigrants to Canada can get more information about Canadian income tax and RRSPs from the CRA publication T4055 - Newcomers to Canada.
Tax Tip: Contributions made in the first 60 days of the year can be used as a contribution for the prior tax year or the upcoming tax year.
Maximum Annual RRSP Contribution Limits
The maximum RRSP contribution amount that can be deducted is called the "RRSP deduction limit", and is also known as "contribution room" or "deduction room". Your deduction limit is found on your Notice of Assessment or Notice of Reassessment from Canada Revenue Agency (CRA). Your 2023 limit would be on your 2022 Notice, received after you file your 2022 income tax return. The deduction limit is calculated as:
| 18% of "earned income" for the preceding year, to an annual maximum (see following table) |
| less the "pension adjustment" amount, for participants in a Registered Pension Plan (RPP) or Deferred Profit Sharing Plan (DPSP) |
| less any "past service pension adjustment", for participants in a RPP or DPSP |
| plus any "past service pension adjustment" reversals |
| plus unused deduction room carried forward from the previous year |
Note that RRSP withdrawals do not affect the deduction limit (contribution room) - that only happens with TFSAs.
The annual limits for RRSPs, money purchase (defined contribution) RPPs, deferred profit sharing plans (DPSPs), and defined benefit RPPs are:
| Year | Annual Contribution Limits | Defined
Benefit RPPs - Max Pension Benefit per Year of Service |
||
| RRSPs | Money Purchase (MP) RPPs |
DPSP | ||
| 2026 | $33,810 | 1/2 the MP limit | 1/9 the MP limit | |
| 2025 | $32,490 | $33,810 | $16,905 | $3,756.67 |
| 2024 | $31,560 | $32,490 | $16,245 | $3,610.00 |
| 2023 | $30,780 | $31,560 | $15,780 | $3,506.67 |
| 2022 | $29,210 | $30,780 | $15,390 | $3,420.00 |
| 2021 | $27,830 | $29,210 | $14,605 | $3,245.56 |
| 2020 | $27,230 | $27,830 | $13,915 | $3,092.22 |
| 2019 | $26,500 | $27,230 | $13,615 | $3,025.56 |
| 2018 | $26,230 | $26,500 | $13,250 | $2,944.44 |
| 2017 | $26,010 | $26,230 | $13,115 | $2,914.44 |
| 2016 | $25,370 | $26,010 | $13,005 | $2,890.00 |
| 2015 | $24,930 | $25,370 | $12,685 | $2,818.89 |
| 2014 | $24,270 | $24,930 | $12,465 | $2,770.00 |
| 2013 | $23,820 | $24,270 | $12,135 | $2,696.67 |
| 2012 | $22,970 | $23,820 | $11,910 | $2,646.67 |
| 2011 | $22,450 | $22,970 | $11,485 | $2,552.22 |
| 2010 | $22,000 | $22,450 | $11,225 | $2,494.44 |
| 2009 | $21,000 | $22,000 | $11,000 | $2,444.44 |
| 2008 | $20,000 | $21,000 | $10,500 | $2,333.33 |
| 2007 | $19,000 | $20,000 | $10,000 | $2,222.22 |
| 2006 | $18,000 | $19,000 | $9,500 | $2,111.11 |
| 2005 | $16,500 | $18,000 | $9,000 | $2,000.00 |
The DPSP limit is 1/2 of the MP limit each year. The MP limit and DPSP limits for pension adjustment (PA) purposes are also restricted to 18% of compensation.
For each year after 2009 for RPPs and 2010 for RRSPs, the limits are indexed for inflation using the Industrial Aggregate average wages and salaries in Canada.
RRSP limits lag behind RPP limits by one year because RRSP limits are based on prior-year earnings, and RPP limits are based on current-year earnings.
RRSP Deduction Limit Examples
The following deduction limit examples assume that the taxpayers do not have contribution room carried forward from previous years.
| Deduction Limit Examples for RRSPs | Taxpayer 1 | Taxpayer 2 | Taxpayer 3 |
| Earned income in 2023 | $25,000 | $45,000 | $180,000 |
| Deduction limit for 2024 = 18% of 2023 earned income, to maximum of $31,560 |
$4,500 | $8,100 | $31,560 |
The maximum of $$31,560 for 2024 would be reached at an earned income amount of $175,333 in 2023.
RRSP Deduction Room Carried Forward
If the RRSP contribution is less than the deduction limit, then the "deduction room" or "contribution room" is carried forward to future years. Assume Taxpayer 3 made a contribution of only $10,000 for 2024. The unused deduction "room" of $21,560 can be carried forward and added to the calculation of the 2025 deduction limit.
RRSP Contributions Carried Forward
It is not mandatory to actually deduct all of your contributions on the current year tax return. If you know you will be in a higher tax bracket in the following year, it may be an advantage to carry forward some or all of the contributions, instead of claiming them in the current tax year. The advantage of doing this must be weighed against the disadvantage of receiving the tax reduction in a later year. Any unused contributions will be carried forward until you decide to use them. Even if you are not claiming the contributions in the current year, you must record on your tax return that the funds have been contributed.
There is no time limit on the carry-forward of RRSP contributions that have not been deducted - even if your RRSP has been converted to a RRIF at age 71, if you have contributions that have not been deducted, they can still be deducted in the future. You can also make RRSP contributions after age 71, if you have a younger spouse.
RRSP Contribution Room at Death
Unused contribution room (deduction limit) cannot be used to make a contribution to the RRSP of a deceased individual. However, it can be used to make a spousal contribution to the RRSP of the surviving spouse or common-law partner, in the year of death or during the first 60 days after the end of that year. These contributions can be claimed on the tax return of the deceased for the year of death.
For more on this topic, and examples, see Canada Revenue Agency's Contributing to your spouse's or common-law partner's RRSPs.
RRSP Excess Contributions
A taxpayer can contribute up to the amount of their deduction limit, plus an excess contribution as long as the total excess contribution never exceeds $2,000. However, the allowed excess will be less than $2,000 when the deduction limit is negative due to a PSPA amount. Also, only taxpayers who are 19 or older in the taxation year qualify to have an excess amount. Any excess contribution over $2,000 may be subject to a 1% per month tax.
Tax Tip: Each individual taxpayer is ultimately responsible to ensure that they do not overcontribute to their RRSP - not their accountant or financial planner.
Check Your RRSP Contribution Limit Before Making Contributions!!
Before you make a contribution, check your latest notice of assessment, or go online to My Account to see the amount of available contribution room at the end of the prior tax year. Take into account any contributions made since then, including any contributions by your employer. If you're planning your current year contributions, make sure you include matching contributions that will be made during the rest of the year by your employer.
Keep in mind the Federal Court of Appeal decision in Connolly v. Canada (National Revenue) 2019 FCA 161, which upheld CRA's decision to refuse to waive penalties and interest on an overcontribution. See Jamie Golombek's June 2019 article discussing this case.
Apply to Withdraw an Overcontribution Immediately!
When an excess contribution greater than $2,000 has been made, or an excess contribution of up to $2,000 that you will never be able to deduct, contact your financial institution or brokerage as soon as possible to determine the best remedy. If the contribution has already been reported to CRA by your brokerage, application can be made to CRA using form T3012A Tax Deduction Waiver on the Refund of your Unused RRSP Contributions, in order to withdraw the amounts without having income tax deducted. CRA will return the form, indicating the amount that is authorized to be withdrawn without deducting withholding tax. However, a tax on the excess may still be payable if the excess was over $2,000.
When you make an RRSP contribution it increases your unused contributions, until you use the contributions to reduce your income. Thus, after you complete the form, when you withdraw the overcontribution this will reduce your unused contributions by the same amount.
Tax on Excess RRSP Contributions
See Tax on Excess Contributions in the CRA publication T4040 - RRSPs and Other Registered Plans for Retirement.
If you are required to pay the tax on excess contributions, CRA's form T1-OVP Individual Tax Return for Excess Contributions must be completed.
Are You Required to Pay the RRSP Overcontribution Tax?
If you are not sure if you are required to pay the tax, follow the steps in CRA's Determine if you have to complete a T1-OVP. You can also view the T1-OVP, to see which amounts that were contributed to your RRSP during the first 60 days of the year are not considered overcontributions (they will be deducted or designated (used) in the current taxation year), such as:
| eligible part of retiring allowance |
| eligible part of a lump-sum pension payment |
See the T1-OVP for more.
Tax Tips:
Include matching contributions by your employer as part of your total contributions.
Don't overcontribute!
If you have overcontributed, act to remedy this as soon as possible - get professional advice if you're unsure what to do.
Note re Home Buyer's Plan and Lifelong Learning Plan
Your RRSP contributions must remain in the RRSP for at least 90 days before you can withdraw them under the Home Buyer's Plan (HBP) or Lifelong Learning Plan (LLP), or the contributions may not be deductible for any year. In other words, if RRSP contributions are made in the 89-day period just prior to an HBP or LLP withdrawal from the RRSP, the value of the RRSP after the HPB or LLP withdrawal must be at least equal to those contributions.
RRSP Savings Calculator
To calculate savings from an RRSP contribution, see the Detailed Canadian Income Tax Calculators.
Canada Revenue Agency (CRA) Resources
MP, DB, RRSP, DPSP, ALDA, TFSA limits, YMPE and the YAMPE
T4040 - RRSPs and Other Registered Plans for Retirement - see RRSP contributions section
Determine if you have to complete a T1-OVP
T1-OVP Individual Tax Return for Excess Contributions
Contributing to a RRSP, PRPP or SPP
Tax Tip: Pay yourself first.
Revised: December 06, 2024