RRSP Contribution Limit Explained

RRSP Contribution Limit and Room, Explained

Banks love the RRSP season and the ads that come with it, but no bank knows your limit. Only CRA does. The good news is that it's printed on a document you already have, and the formula behind it is simpler than the ads make it look.

The Formula

Step	Example
18% of last year's earned income	18% x $90,000 = $16,200
Capped at the dollar limit ($33,810 for 2026)	$16,200 (under the cap)
Minus your pension adjustment (T4 box 52)	– $4,000
Plus unused room from earlier years	+ $10,000
Your 2026 RRSP deduction limit	$22,200

The pension adjustment is the value of the pension you earned in a workplace plan last year (box 52 of your T4). People with good pensions have less RRSP room, which is the system's way of keeping things fair between them and everyone else. Pension adjustment reversals and past-service adjustments can move it up or down.

To earn the maximum $33,810 of new room for 2026, you needed $187,833 of earned income in 2025 (with no pension adjustment).

What Counts as Earned Income

• Counts: employment income, net self-employment income, net rental income, taxable spousal support received, and some disability pensions.
• Reduces it: rental and business losses, and deductible support you paid.
• Doesn't count: investment income, capital gains, pensions, RRSP withdrawals, EI, OAS and CPP retirement benefits.

Retirees living on pensions and investments stop building new room. That's fine; by then, the plan is to take money out, not put it in.

Where to Find Your Exact Limit

1. Your latest notice of assessment: look for the RRSP deduction limit statement. See notice of assessment explained.
2. CRA My Account, under RRSP and TFSA, which also shows unused contributions.
3. Form T1028, which CRA sends if your limit changed after assessment.

Subtract anything you've contributed since January 1 that you haven't yet reported, including first-60-day contributions, before you buy more.

Room vs. Deduction: Not the Same Thing

Contributing and deducting are separate decisions. You can contribute now and deduct later, which is handy if you get a bonus next year and want the deduction at a higher rate. The contribution must still be reported in the year it's made, on Schedule 7. Unused contributions carry forward indefinitely. What a deduction actually saves is on RRSP tax deduction explained, and the RRSP tax savings calculator runs your numbers.

Things That Don't Use RRSP Room

• Repaying the Home Buyers' Plan or Lifelong Learning Plan.
• Rolling an eligible retiring allowance (T4 code 66) into an RRSP, within its own limits.
• Direct transfers between registered plans, such as a pension commuted value (within limits) or an FHSA transfer.

Thinking about a first home? The FHSA has its own room, separate from the RRSP.

Three Rules of Thumb

1. Check the number every year on your notice before contributing.
2. Count every contribution, including group RRSPs through work and automatic monthly ones.
3. Stay well inside the $2,000 buffer. It's for mistakes, not a bonus; see RRSP overcontribution.

Before you file, Return Check compares your RRSP claim with your limit and your receipts.

RRSP Limit Questions

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Sources: CRA, MP, DB, RRSP, DPSP, ALDA, TFSA limits; RRSPs and related plans; Guide T4040. Example figures are illustrative. Checked October 2026.

Last reviewed October 4, 2026 against CRA and Government of Canada sources. How we check our facts.