The RRSP contribution limit for 2024 is $31,560 or 18% of your income, whichever is less. If you're trying to get some last minute deductions for the 2023 tax year, your limit is $30,780 or 18%.
You have until February 29 to make your 2023 RRSP contributions and until the same time in 2025 to make your contributions for the 2024 tax year. If your contributions don't quite reach the limit, any unused room will be carried over into the next year. So if you don't contribute the full $30,780 for 2023, you'll have some extra room to work with in 2024.
Here, we provide details regarding the RRSP contribution limit, explain how the tax deductions work, suggest a few investment options to hold within your retirement savings account, and much more.
Key Takeaways
- For the 2023 tax year, the RRSP contribution limit is $30,780 or 18% of your income (whichever is less).
- After February 29, the RRSP contribution limit for 2024 is set at $31,560 or 18%.
- Any unused contributions are carried over to the next year.
- You can check your current RRSP limit on your My Service Canada account.
- If you overcontribute, you'll be taxed 1% of the amount you're over until you withdraw it.
RRSP contribution limit for 2024
The RRSP contribution limit for 2023 is $30,780 and will go up to $31,560 for 2024. This means that you're able to make deposits of any size throughout the year as long as you don't exceed this contribution amount.
Here's a look at what the contribution limits for the past 10 years:
| Year | RRSP contribution limit |
|---|---|
| 2024 | $31,560 |
| 2023 | $30,780 |
| 2022 | $29,210 |
| 2021 | $27,830 |
| 2020 | $27,230 |
| 2019 | $26,500 |
| 2018 | $26,230 |
| 2017 | $26,010 |
| 2016 | $25,370 |
| 2015 | $24,930 |
| 2014 | $24,270 |
How to figure out your contribution room
If you don't contribute the full amount for the year, the remainder is carried over and added to your limit for the following year. For example, if you didn't meet the 2022 contribution limit of $29,210 and contributed $19,200, you now essentially have $10,000 of extra contribution room for 2023.
To determine what your total contribution room is, you can either use an online RRSP calculator and crunch the numbers yourself, or you can check the notice of assessment you received from the CRA after filing your taxes last year.
An RRSP calculator can do more than just determine your contribution room, though. It can help to determine:
- how much tax you will save with your contributions this year,
- calculate your limit for this year, and
- how much your RRSP will be worth when you retire.
RRSP contribution limit example
Calculating your RRSP contribution limits can be confusing so let’s use an example to illustrate it.
Cassie is living in Toronto, Ontario. She opened her first and only RRSP in 2022 at TD Bank. In 2022 she contributed $3,000 and in 2023, she contributed $5,000. Her annual salary is $70,000.
Let’s break it down.
| Year | Max. contribution limits by year | 18% of Cassie’s income | How much she contributed |
|---|---|---|---|
| 2022 | $29,210 | $12,600 | $3,000 |
| 2023 | $30,780 | $12,600 | $5,000 |
Cassie has contributed $8,000 to her RRSP account to date. To figure out her contribution limit, she would use 18% of her income since it’s lower than the maximum limit.
To determine her 2023 contribution room, we would take the 18% calculation for each year and minus the contributions she made:
2022: $12,600 - $3,000 = $9,600 (contribution room carried over)
2023: ($9,600 + $12,600) - $5,000 = $17,200
Cassie's contribution room for 2023 would be $17,200.
What percentage of my RRSP is tax deductible?
All contributions made to your RRSP are tax deductible, so you could owe less after filing your taxes or perhaps even get a refund.
For example, if you contributed $5,200, and your annual income was $75,000, you can expect a tax break of around $1,500 to $1,800, depending on your province or territory.
Pro tip: A good idea is to automate your contributions. Set up an account with your bank or an online broker and have your contributions automatically deposited into it. This can reduce the risk of exceeding the RRSP contribution limit and ensure you get the best possible tax deductions.
What if I exceed my RRSP deduction limit?
Generally, you have to pay 1% tax per month on overages of more than $2,000, unless you withdraw the excess amount. If you do withdraw the excess, you'll be taxed on it.
To pay this 1% tax, you’ll have to fill out some forms and make the payment within 90 days after the calendar year that you hit the overcontribution limit. Otherwise, you’ll be charged even more late penalties or interest.
So to summarize – for every month you’re over, you pay 1% on the amount that exceeds your maximum. There’s also a cumulative lifetime limit for overcontributions to keep in mind – this is capped at $2,000.
Your RRSP investment options
An RRSP can hold a variety of investments to fit your preferred investment style and risk tolerance, including:
- Cash
- Bonds
- Options
- Mutual funds
- ETFs
There are also ineligible investment options that can't be help within an RRSP, which include:
- Cryptocurrency
- Gold and silver (coins, bullion, certificates)
- Any securities listed on a designated stock exchange
- Shares or debt of a public corporation
- Shares of a specified small business corporation
As you can see, the types that are accepted by RRSPs are much more common investment types than those that are ineligible.
What do your RRSP contributions look like?
As long as you keep the annual RRSP contribution limit in mind, taking advantage of this registered account can help you build your retirement savings, reduce your taxes payable, and serve as a valuable flexible investment.
What about you? Do you reach the max RRSP contribution limits each year? What types of investments do you use?
Please feel free to share your insights and thoughts in the comments.
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$25 GeniusCash + Delicious meal choices with fresh ingredients + Front-door delivery.FAQ
What is the RRSP contribution limit for 2024?
The 2024 RRSP contribution limit is $31,560. However, you may have extra contribution room if you didn't reach the 2023 limit. If you overcontribute, you'll be taxed 1% per month on any overage amount over $2,000.
Can I use an RRSP contribution limit calculator?
Yes, there are many of these calculators out there. Another way to calculate your contribution limit is to get your notice of assessment from the CRA and combine your limit amount with any unused contributions.
Does the CRA set RRSP contribution limits?
Yes, the Canada Revenue Agency sets the contribution limits each year and they usually increase from the previous year. In recent years, the contribution limit has increased by various increments, anywhere between $200 and $1,500 each time.
Is there a lifetime limit on RRSP contributions?
No, there is no lifetime limit on how much you can contribute to your RRSP. Your limit is based on the government-imposed annual limit and your personal contribution room. However, there is a lifetime allowance of $2,000 for overcontributions.
What's the RRSP age limit?
The age limit is 71. Once you reach December 31 of the year you turn 71, you can no longer contribute to your own RRSP. You may, however, be able to contribute to a spousal RRSP for your loved one.
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