RRSP Calculator
Work out your 2026 RRSP contribution room, the tax refund a contribution generates, and what the money grows to before you draw it in retirement.
How to use this calculator
- 1Enter last year's earned income — this year's does not affect this year's room.
- 2Take the carry-forward figure from your CRA notice of assessment; it is usually the largest part of the room.
- 3Add your pension adjustment from box 52 of your T4 if you are in a workplace pension.
- 4Compare your marginal rate now against your expected rate in retirement — the gap between them is the entire benefit.
How the calculation works
Room = min(18% × prior-year earned income, $33,810) − pension adjustment + carry-forward. Refund ≈ contribution × marginal rate- earned income
- Employment and self-employment income from the *previous* year, not this one
- pension adjustment
- Box 52 of your T4 — the value of workplace pension benefits, which reduces RRSP room
- carry-forward
- Unused room from every prior year. It never expires
Room is based on last year's income, not this year's. Someone whose income jumped this year does not get the larger room until the following year, which catches people who expect a big raise to immediately increase what they can contribute.
The refund is an approximation: a large contribution can drop you through a bracket, so the effective rate on it is a blend rather than your top marginal rate. It is accurate for contributions that stay within one bracket.
The $2,000 lifetime over-contribution buffer is not deductible — it merely avoids the penalty. Beyond it, 1% a month accrues until the excess is withdrawn, which is punitive rather than nominal.
Worked example
$95,000 earned income, contributing $15,000
- 1.18% of $95,000 is $17,100, which is below the $33,810 annual limit, so the percentage applies.
- 2.With no pension adjustment and no carry-forward, the room is $17,100.
- 3.A $15,000 contribution refunds roughly 43.41% of it — about $6,512.
- 4.That leaves $2,100 of room, which carries forward indefinitely.
Result: $17,100 of room, about $6,512 back
Where the annual limit bites
- 1.18% of $220,000 is $39,600, above the $33,810 annual dollar limit.
- 2.The limit applies instead, so only $33,810 of new room is generated.
- 3.High earners therefore stop accruing room proportionally once income passes about $187,833.
Result: Room capped at $33,810 regardless of income
How RRSP room is actually calculated
Your contribution room for a year is 18% of the previous year's earned income, capped at that year's dollar limit — $33,810 for 2026. Because of the cap, income above roughly $187,833 generates no additional room.
Two adjustments then apply. If you belong to a workplace pension plan, a pension adjustment reduces your room, reflecting the value of the benefits you accrued there — this is why pension members often have far less RRSP room than their salary suggests. And unused room from every previous year is added on, with no expiry.
That carry-forward is usually the dominant term. Someone who has contributed little over a decade may have well over a hundred thousand dollars of room available. The figure to trust is the one on your CRA notice of assessment, which does all of this for you — this calculator shows how it was arrived at.
RRSP against TFSA, decided by one comparison
The two accounts are mirror images. An RRSP gives a deduction now and taxes the withdrawal; a TFSA is funded with after-tax money and the withdrawal is free. Where the tax rate is identical at both ends, the two produce mathematically identical results.
So the decision reduces to one question: will your rate in retirement be lower than your rate today? For a mid-to-high earner who expects a modest retirement income, the RRSP wins, and the higher the current rate the more decisively. For someone in a low bracket now — early career, part-time, or a year of low income — the TFSA is usually better, and contributing to an RRSP at a 20% rate to withdraw at 30% is an actual loss.
Two wrinkles favour the RRSP beyond the arithmetic. The refund can itself be invested, and the deduction can be *carried forward* — you may contribute this year and claim the deduction in a later, higher-income year, which is often the right move for someone expecting a promotion.
The mistakes that cost real money
Three errors come up repeatedly, and all are avoidable.
- Over-contributing — there is a $2,000 lifetime buffer, and it is not deductible — it only spares you the penalty. Beyond it, 1% per month accrues on the excess until it is withdrawn. That is 12% a year, and it compounds quietly because nobody sends a reminder.
- Using this year's income — room comes from the previous year's earned income. A big raise does not increase what you can contribute until the following year.
- Withdrawing early — RRSP withdrawals are fully taxable as income and, apart from the Home Buyers' Plan and Lifelong Learning Plan, the room is gone permanently once used. Unlike a TFSA, withdrawing does not restore room — which makes an RRSP a poor place for money you may need.
What this assumes, and where it stops
Assumptions
- 2026 federal limits apply, and earned income is the previous year's figure.
- The refund is calculated at a single marginal rate covering the whole contribution.
- A constant return applies through to withdrawal, and the whole balance is withdrawn at the retirement rate entered.
- Home Buyers' Plan and Lifelong Learning Plan withdrawals are excluded.
Limitations
- A large contribution can span two tax brackets, so the real refund is a blend rather than the single rate shown.
- Provincial rates vary widely — the combined marginal rate at the same income differs by several points between provinces.
- The pension adjustment must be taken from your T4; it cannot be derived from salary.
- This is a planning estimate. Your CRA notice of assessment is the authoritative statement of your room.
Common questions
How much RRSP room do I have for 2026?
18% of your 2025 earned income, capped at $33,810, less any pension adjustment, plus all unused room carried forward from previous years. The carry-forward is usually the biggest component and never expires. Your CRA notice of assessment states the exact figure — this calculator shows how that number is built up so you can sanity-check it.
Should I use an RRSP or a TFSA?
It comes down to whether your tax rate in retirement will be lower than it is now. If yes — typical for mid-to-high earners — the RRSP wins, because you deduct at a high rate and withdraw at a low one. If you are currently in a low bracket, the TFSA is usually better, and contributing to an RRSP at 20% to withdraw at 30% actually loses money. At identical rates the two are mathematically equivalent.
What happens if I over-contribute to my RRSP?
There is a $2,000 lifetime buffer that avoids penalty but is not deductible. Above that, a penalty tax of 1% per month applies to the excess until you withdraw it — 12% a year, accruing quietly since nobody notifies you. If it happens, withdrawing promptly and filing the required form is the way to stop the clock.
Does my RRSP room go up if I get a raise?
Yes, but not immediately. Room is calculated from the previous year's earned income, so a raise this year increases the room you receive next year. It is also capped: 18% of income stops mattering above roughly $187,833, because that is where the percentage exceeds the $33,810 annual dollar limit.
Sources
- RRSP contribution limit — Canada Revenue Agency
- MP, DB, RRSP, DPSP, ALDA, TFSA dollar limits and the YMPE — Canada Revenue Agency
Formula and content last reviewed on .
Results are estimates for information only, not professional advice.
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