RRSP Calculator
Calculate your Canadian RRSP contribution limit from earned income and carried-forward room, plus a tax-deferred growth projection to retirement.
Written by Rahman · Last reviewed
Quick answer
An RRSP (Registered Retirement Savings Plan) lets Canadians deduct contributions from this year's taxable income, then defers all tax (on both contributions and growth) until withdrawal, typically in retirement. Room accrues at 18% of last year's earned income, capped at the annual dollar limit (C$33,810 for 2026), plus any unused room carried forward from prior years.
The estimated refund is C$6,000 in contributions × 30% — a rough guide, not a real tax computation. Your actual refund depends on your whole return, not just this one deduction, and RRSP withdrawals in retirement are taxed as income — unlike a TFSA, this account defers tax rather than eliminating it.
Results are estimates for general guidance and are not financial, tax or legal advice. Except where a calculator names a currency, figures carry no currency of their own: put in pounds and you get pounds back, put in rupees and you get rupees. Figures depend on the assumptions you enter and on rates that change over time. Check current rates and speak to a qualified adviser before acting on them.
About the RRSP Calculator
An RRSP is a Canadian retirement account that works in the opposite direction to a TFSA: contributions are deducted from your taxable income this year, so the immediate benefit is a smaller tax bill or a bigger refund, not tax-free growth. Every dollar that comes out later (the original contribution and every dollar it earned) is taxed as ordinary income in the year you withdraw it.
Room accrues automatically at 18% of your earned income from the previous year, capped at an annual dollar limit that CRA sets each November (C$33,810 for 2026). Unused room carries forward indefinitely, which is why the calculator asks for it directly rather than trying to reconstruct your entire contribution history.
Limit = min(18% × last year's earned income, annual dollar limit) + unused room carried forward. Future value uses the same monthly-compounding annuity formula as this site's other investment calculators: FV = balance × (1 + r)^n + contribution × [((1 + r)^n − 1) / r] × (1 + r).
r is the monthly return rate, n is the number of months. Above the income level where 18% already exceeds the dollar limit (around C$187,833 for 2026), extra income adds nothing further to this year's room.
Earning C$70,000 in earned income accrues C$12,600 of new room (18% × C$70,000) on top of whatever was carried forward. Contributing C$500/month from a C$30,000 starting balance at 6% for 30 years grows to about C$685,000, of which roughly C$475,000 is tax-deferred investment growth, all of it taxable as ordinary income when withdrawn.
The deduction and the tax-deferred growth are two separate benefits
A common misreading of an RRSP is that it makes the whole balance "tax-free" the way a TFSA does. It does not. The contribution earns a deduction against this year's income (worth more the higher your current tax bracket), and separately, the balance is not taxed year to year while it grows. Both benefits reverse at withdrawal: the entire amount taken out, principal and growth together, is added to that year's taxable income.
This is why an RRSP is often described as tax-deferred rather than tax-free: it moves the tax bill from today to retirement, and the trade only pays off if your tax rate later is lower than it is now.
- A high earner today who expects a modest retirement income is the textbook case for an RRSP: the deduction is claimed at a high rate, the withdrawal is taxed at a lower one.
- Someone already in a low bracket has less to gain from the deduction, and may prefer a TFSA instead; see the TFSA Calculator's own comparison.
- Contributing your full room every year is not itself a strategy: timing large contributions to years you are in a higher bracket, when your income varies, captures more of the deduction's value.
Contributions must stop the year you turn 71
CRA sets a firm age limit: December 31 of the year you turn 71 is the last day you can contribute to your own RRSP. By that date the account must be converted, commonly to a Registered Retirement Income Fund (RRIF) or an annuity, and the balance continues to be taxed on withdrawal from there, just under different minimum-withdrawal rules.
This calculator flags the cutoff if it falls inside your chosen projection period, but it does not model a RRIF's minimum-withdrawal schedule; that is a genuinely different calculation once contributions stop and withdrawals begin.
2026 RRSP room from earned income (no carry-forward)
| Earned income (last year) | This year's new room |
|---|---|
| C$40,000 | C$7,200 |
| C$70,000 | C$12,600 |
| C$100,000 | C$18,000 |
| C$187,833 or more | C$33,810 (the 2026 dollar cap) |
Room is 18% of earned income up to the annual dollar limit; above roughly C$187,833 of earned income, the dollar limit binds and further income adds nothing more to this year's room.
Frequently Asked Questions
What is the RRSP contribution limit for 2026?
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The lesser of 18% of your 2025 earned income or C$33,810, plus any unused room carried forward from prior years.
Is RRSP money really tax-free?
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No. It is tax-deferred, not tax-free. You get a deduction now, but the entire withdrawal (contributions and growth) is taxed as income later. A TFSA is the account that is genuinely tax-free on withdrawal.
What happens to my RRSP at age 71?
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You can no longer contribute after December 31 of the year you turn 71. The account must be converted, most commonly to a RRIF or an annuity, and minimum withdrawals begin the following year.
RRSP or TFSA: which should I use first?
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An RRSP tends to win when your tax rate in retirement will be lower than today, since the deduction is banked at today’s higher rate. A TFSA tends to win when you expect a similar or higher future rate. See the TFSA Calculator for the reverse comparison.
Sources
- Canada.ca — How contributions affect your RRSP deduction limit — The 18%-of-earned-income rule and that the year's limit is the lesser of that and the annual dollar maximum.
- Canada.ca — MP, DB, RRSP, DPSP, ALDA, TFSA limits, YMPE and the YAMPE — Official 2026 RRSP annual dollar limit (C$33,810).
- Canada.ca — RRSP options when you turn 71 — December 31 of the year you turn 71 is the last day you can contribute to your own RRSP.