An RRSP (Registered Retirement Savings Plan) is a Canadian tax-advantaged account that lets you deduct contributions from your taxable income and grow investments tax-deferred until withdrawal. It is designed to help Canadians save for retirement.

Are RRSP contributions tax deductible?

Yes. RRSP contributions are usually tax deductible against your income for the year you claim them, up to your available RRSP room. The deduction can reduce your taxable income and generate an immediate tax refund or lower tax bill.

What happens if I overcontribute to my RRSP?

If you overcontribute more than the $2,000 lifetime buffer above your RRSP limit, the CRA may charge a 1% per month penalty tax on the excess amount until it is withdrawn or new room becomes available. You should speak with a tax professional if you think you have overcontributed.

What tax rate should I use in this RRSP calculator?

Use your approximate marginal tax rate – the rate of tax you pay on your next dollar of income. This depends on your province or territory and your income level. The calculator uses this rate to estimate your immediate tax savings from an RRSP contribution.

How is an RRSP different from a TFSA?

RRSP contributions are tax deductible and withdrawals are fully taxable. TFSA contributions are not deductible, but withdrawals are tax-free. RRSPs are often better when your tax rate in retirement will be lower than today; TFSAs can be better if your tax rate will be the same or higher later.

RRSP Calculator (Registered Retirement Savings Plan)

Q: How is my RRSP contribution limit calculated?

Your RRSP contribution limit for a year is generally 18% of your previous year’s earned income, up to an annual dollar maximum set by the CRA, plus any unused contribution room carried forward from prior years, minus any pension adjustment (if you are in a pension plan).

Estimate your RRSP contribution room, tax savings, and future retirement value. Tailored for Canadian taxpayers.

RRSP Contribution & Tax Savings Calculator

Last year’s earned income (for RRSP room)

Employment or self-employment income from last year (before deductions).

Unused RRSP room carried forward

From your latest CRA Notice of Assessment.

Pension adjustment (PA)

If you are in a workplace pension plan. Otherwise leave as 0.

Current marginal tax rate

Approximate combined federal + provincial/territorial rate.

Planned RRSP contribution this year

You can also click “Max allowed” below to auto-fill.

Years until retirement

Expected annual return

Estimated marginal tax rate in retirement

Used to compare RRSP vs TFSA after-tax value.

RRSP room & contribution summary

New RRSP room from income: $0
Total available RRSP room: $0
Planned contribution: $0
Remaining RRSP room: $0

Tax savings

Estimated immediate tax savings: $0
Effective after-tax cost of contribution: $0

Future value at retirement

RRSP value before tax: $0
RRSP after-tax value (using retirement tax rate): $0
TFSA after-tax value (if same contribution): $0

How this RRSP calculator works

This RRSP (Registered Retirement Savings Plan) calculator is designed for Canadian residents who want to:

Estimate their RRSP contribution room based on income and carry-forward room.
See the immediate tax savings from an RRSP contribution.
Project the future value of a one-time contribution.
Compare the after-tax value of RRSP vs TFSA for the same contribution.

1. RRSP contribution room formula (simplified)

The CRA calculates your official RRSP limit each year and shows it on your Notice of Assessment. This calculator uses a simplified version of the rules:

New RRSP room = min(18% × last year’s earned income, annual CRA dollar limit) − pension adjustment (PA)

Then we add any unused room you carried forward:

Total available RRSP room = New RRSP room + Unused RRSP room carried forward

Note: The annual dollar limit changes each year (e.g. $31,560 for 2024, $30,780 for 2023). This calculator uses an approximate limit that you can adjust mentally; always rely on your CRA Notice of Assessment for the official number.

2. Tax savings from an RRSP contribution

RRSP contributions are usually tax deductible. If your marginal tax rate is t and you contribute C, your estimated tax savings are:

Tax savings = C × (t / 100)

The after-tax cost of your contribution is:

After-tax cost = C − Tax savings

3. Future value of your RRSP at retirement

For a one-time contribution, assuming a constant annual return r over n years, the future value is:

RRSP future value = C × (1 + r/100)ⁿ

Because RRSP withdrawals are taxable, we estimate the after-tax RRSP value using your expected marginal tax rate in retirement t_ret:

RRSP after-tax value = RRSP future value × (1 − t_ret/100)

4. RRSP vs TFSA comparison

To compare with a TFSA, we assume you contribute the same dollar amount C to a TFSA:

TFSA future value = C × (1 + r/100)ⁿ (tax-free on withdrawal)

The calculator then shows whether, under your assumptions, the RRSP or TFSA leaves you with more money after tax at retirement.

When an RRSP makes the most sense

Your current tax rate is higher than what you expect in retirement.
You can reinvest your tax refund (e.g. into RRSP, TFSA, or debt repayment).
You have stable income and want to smooth taxes over your lifetime.

RRSP vs TFSA: simple rule of thumb

If future tax rate < current tax rate → RRSP often wins.
If future tax rate > current tax rate → TFSA often wins.
If rates are similar → both are valuable; diversification between RRSP and TFSA can reduce risk.

Key RRSP rules to remember

RRSP contribution room starts building once you have earned income and file a tax return.
Unused RRSP room carries forward indefinitely.
You can contribute until December 31 of the year you turn 71, then your RRSP must be converted (e.g. to a RRIF or annuity).
Withdrawals are generally fully taxable as income in the year you take them out.
Special programs like the Home Buyers’ Plan (HBP) and Lifelong Learning Plan (LLP) allow temporary tax-free withdrawals if you follow the repayment rules.

Limitations & disclaimers

This RRSP calculator is for educational and planning purposes only. It simplifies CRA rules and does not account for:

Exact annual RRSP dollar limits by year.
Detailed pension adjustments, past service pension adjustments, or pension adjustment reversals.
OAS clawback, GIS, or other income-tested benefits.
Inflation, investment fees, or changes in tax law.

Always verify your official RRSP room with your CRA My Account or Notice of Assessment, and consider speaking with a qualified tax or financial professional before making major decisions.

RRSP FAQs

What is an RRSP?

An RRSP (Registered Retirement Savings Plan) is a tax-advantaged investment account registered with the Canada Revenue Agency. Contributions are usually tax deductible, investments grow tax-deferred, and withdrawals are taxed as income when you take the money out.

How is my RRSP contribution limit calculated?

Your RRSP limit for a year is generally 18% of your previous year’s earned income, up to the CRA’s annual dollar maximum, plus any unused room carried forward, minus pension adjustments if you are in a pension plan. Your exact limit is shown on your CRA Notice of Assessment.

Can I carry forward unused RRSP room?

Yes. Any unused RRSP contribution room carries forward indefinitely. This allows you to catch up in higher-income years or when you have more cash available to invest.

What happens if I overcontribute?

You are allowed a lifetime buffer of $2,000 in RRSP overcontributions (not tax deductible). Beyond that, the CRA may charge a 1% per month penalty tax on the excess amount. If you think you have overcontributed, contact the CRA or a tax professional promptly.

Should I use an RRSP or TFSA first?

It depends on your current and expected future tax rates, income stability, and goals. If your tax rate will likely be lower in retirement, RRSPs are often more attractive. If your tax rate may be higher later, or you need more flexibility, TFSAs can be better. Many Canadians use both.