RRSP contribution calculator
An RRSP contribution comes off your income before tax, so it saves tax at the rate on your top dollars. Room is 18% of last year's earned income, capped at $33,810 for 2026.
Employment income for the year the contribution is deducted.
Room is 18% of this, up to the yearly cap.
Results
18% of last year's earned income.
Contribution less the tax saving.
Assumptions
- Room is 18% of the prior year earned income you enter, capped at the 2026 dollar limit of $33,810.
- Unused room carried forward from earlier years and any pension adjustment are not modelled, so real room is often larger for a saver who has skipped years and smaller for someone in a workplace pension.
- The saving is measured as the drop in federal and provincial income tax, with CPP and EI held unchanged. Contributions do not reduce either of those.
- The contribution is deducted in the same year it is made. Carrying a deduction forward to a higher income year is not modelled.
- Only the basic personal amount is applied as a credit.
- The tax saving arrives as a smaller bill or a refund at filing time, unless your employer reduces the tax withheld at source.
Sources
- MP, DB, RRSP, DPSP, ALDA, TFSA limits and the YMPE, Canada Revenue Agency, checked 30 August 2026
- Canadian income tax rates for individuals, current year, Canada Revenue Agency, checked 30 August 2026
A filer's own limit is 18 percent of prior year earned income up to this cap, adjusted for pension amounts and unused room.
How this works
A contribution to an RRSP is a deduction, not a credit. It comes off your income before the rate schedules run, which means it saves tax at the rate on your highest dollars rather than at the lowest rate. The same contribution is worth far more to someone in a top bracket than to someone near the bottom of the first one, and that gap is the whole reason the timing of a contribution matters.
Room is built from last year, not this one. The CRA gives you 18% of the previous year's earned income, up to a dollar cap that moves each year. For 2026 that cap is $33,810, which is reached at an earned income of about $187,833. Room you do not use does not disappear; it stacks up and stays available.
Two adjustments sit outside this calculation and both matter. If you belong to a workplace pension, a pension adjustment reduces your room by roughly the value of what the pension put aside for you. Going the other way, unused room from earlier years adds to it. The figure the CRA actually uses is printed on your notice of assessment.
The money is taxed when it comes out, so this is a deferral rather than an exemption. What the deferral is worth depends on the rate then against the rate now. For the rates themselves, the income tax estimator shows them bracket by bracket.