How Does the RRSP Contribution Limit Work?

Each year, your RRSP contribution limit is capped at 18% of your earned income from the previous year, up to a maximum limit specified by the government — $32,490 for 2025.

Contributions to a registered retirement savings plan (RRSP) are tax-deductible, helping you lower your tax burden today while saving for the future. By understanding the rules and limits, you can make the most of the RRSP benefits while avoiding penalty fees.

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 your overall limit — not your spouse’s limit.

Are RRSP contributions tax-deductible?

Yes. You can deduct the amount you contribute to your RRSP from your taxable income, which means you’ll be taxed on a lower income.

For the 2025 tax year, the RRSP contribution deadline is March 2, 2026.

However, you don’t have to deduct all your RRSP contributions in the same year. You can carry forward any or all contributions and deduct them in future years.

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

Your RRSP contribution limit is the most you’re allowed to put into your RRSP for the year.

Your RRSP deduction limit is the maximum amount of RRSP contributions you can claim as a deduction on your tax return.

Both unused RRSP contributions and contribution deduction amounts can be carried forward into future years.

When are the RRSP contribution limit and the deduction limit the same?

They're the same when you deduct all of your RRSP contributions on your tax return every year.

When do the RRSP deduction limit and contribution limit differ?

Your RRSP deduction limit and contribution limit are different when you only deduct part of your RRSP contributions in the year you make them. The amount you don’t deduct is carried forward to a future year. In that case, your deduction limit in the next year can be higher than your contribution limit.

It might sound complicated, but you can keep track of your contribution and deduction limits on your notices of assessment or in your CRA My Account.

What happens if I over contribute to my RRSP?

If you contribute more than your limit to your RRSP (or spousal RRSP), it’s called an excess contribution. Contributions that exceed your limit by more than $2,000 are taxed at 1% per month on the surplus amount.

However, the tax may be waived if you either:

How to calculate your RRSP contribution limit

The CRA calculates your deduction and contribution limits using the information you provided on your previous tax return. You can find them on your most recent notice of assessment from the CRA. 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.

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RRSP historical contribution limits

Remember, your annual contribution limit is 18% of your earned income in the previous year, up to the maximum listed below for each year. To deduct the maximum for 2025, you’d need to have earned $180,500 in 2024 (if we assume you haven’t carried any amounts forward).

You can find the new and previous years’ contribution data on the CRA’s website.

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How to make RRSP contributions

You can start making RRSP contributions by opening an RRSP at a financial institution’s branch location or on its website.

Types of RRSP investments

Most banks and credit unions offer a variety of investment options to hold within your RRSP, including:

You can contribute a lump sum once a year or set up regular automatic deposits, such as after each paycheque.

What if I can’t afford to max out my RRSP contribution?

If you can’t contribute the full amount of your contribution limit in a given year, you don’t lose your contribution room. Any unused amount is automatically carried forward to the next year.

For example, let’s say you earned $60,000 in 2025. You can contribute up to 18% of $60,000, which is $10,800. If you contribute $5,000 before the deadline, the remaining $5,800 of room will be added to your contribution limit for 2026.

Your total contribution room will continue to grow until either you contribute the full amount (which is called “maxing out” your contributions) or 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 out an RRSP loan.