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Published November 18, 2022

TFSA Contribution Limit and Withdrawal Rules for 2022

TFSA contribution limits place an annual ceiling — $6,000 for 2022 — on how much you can contribute to a tax-free savings account. Over-contribute and you’ll have to pay a tax penalty to the CRA.

A tax-free savings account, or TFSA, is a registered account that allows you to save, invest and withdraw money without paying taxes. It can be an amazing tool for any Canadian’s portfolio, but it’s important to know — and follow — the contribution limits or you could be penalized by the Canada Revenue Agency.

» See our picks: Canada’s Best High-Interest TFSAs

TFSA contribution limits, current and historical

Even if you haven’t been investing in a TFSA, you’ve been accumulating contribution room — the maximum amount the CRA has determined Canadians can contribute to their accounts — for every year since 2009 that you’ve been at least 18 years old, had a Social Insurance Number and been a Canadian resident.

As of 2022, a total of $81,500 in TFSA contribution room has accumulated for eligible Canadian residents. Once 2023 rolls around, with its increased contribution limit of $6,500, the total contribution room will be $88,000.

YearTFSA Contribution Limit
2023$6,500
2022$6,000
2021$6,000
2020$6,000
2019$6,000
2018$5,500
2017$5,500
2016$5,500
2015$10,000
2014$5,500
2013$5,500
2012$5,000
2011$5,000
2010$5,000
2009$5,000

As of 2022, the maximum a person could have contributed to a TFSA is $81,500.

How to calculate your TFSA contribution limits

You can find your current TFSA contribution room by logging into the CRA My Account website, or by calling the Tax Information Phone Service (TIPS) at 1-800-267-6999.

However, if you’ve contributed to your TFSA in the current tax year, that amount won’t be reflected in your total limit. It’s important to keep track of your TFSA contributions and withdrawals, because there are penalties for over-contributing. More on those in a sec.

As a general rule, you can calculate your TFSA contribution room by adding these three amounts:

  • The current year’s contribution limit.
  • Unused contribution room from previous years.
  • Withdrawals from previous years

Let’s say you opened your TFSA in 2021, when the contribution limit was $6,000. You started off by contributing $3,000 on January 1 and then added another $2,000 once your tax refund came through in May. In July, you had to withdraw $1,000 from your TFSA to pay for a vacation, and weren’t able to put any other money away for the rest of the year.

In 2022, you can add the $1,000 you withdrew from your TFSA and the $1,000 in leftover contribution room to the 2022 limit of $6,000. Assuming you’ve met all the eligibility requirements since 2009, your maximum contribution for 2022 also includes the limits from the years before you started your TFSA, — another $69,500.

In this example, your contribution limit for 2022 is $77,500.

Over-contributing to your TFSA

You don’t want to go over your annual TFSA contribution limit because over-contributions are taxed. You’ll be penalized at a rate of 1% of the excess amount for every month it’s in your account.

If you contributed $7,000 to a TFSA in a year where your limit was $6,000, for example,  you’d pay a 1% penalty on the extra $1,000, or $10, every month until you withdraw it. If you over contribute (or become a non-resident of Canada), you’ll need to file Form RC243, Tax-Free Savings Account (TFSA) Return and pay any taxes owing by June 30 of the following year.

To avoid over-contributing to your TFSA, remember the following:

  • Replace withdrawals next year. If you make a withdrawal from your account, you cannot add it back in the same calendar year.
  • Account for losses. If an investment held in your TFSA loses money, withdrawing the shrunken amount reduces future contribution room. For example, if you withdraw $6,000 from your account that started out as a $10,000 investment, only $6,000 will be added back to your TFSA contribution limit next year.
  • One contribution limit for all of your TFSAs. Your contribution limit doesn’t increase if you have multiple TFSAs. If you have three TFSAs in 2022, you can still only contribute a total of $6,000 for the year.
  • Consider transfers. As long as a financial institution does it on your behalf, you can transfer your TFSA from one financial institution to another without it being considered a withdrawal. But if you personally withdraw the money, invest it in a new TFSA elsewhere and wind up over-contributing, you’ll be subject to over-contribution penalties.
  • Management fees are not withdrawals. If your financial institution charges fees to manage your TFSA, those fees are not considered TFSA withdrawals. They are not added back to your contribution room the following year.

» MORE: How does income tax work?

About the Author

Nora Dunn

Nora Dunn is a former financial planner, and has been a digital nomad since 2006. On her site, TheProfessionalHobo.com, she decodes financially sustainable long-term travel. She's on FB and IG @theprofessionalhobo.

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