TL;DR:
Your RRSP limit is based on last year’s earned income (up to an annual maximum) plus any unused room. Always confirm your official room in CRA My Account.

How RRSP contribution room is calculated

RRSP contribution room is usually 18% of your previous year’s earned income, up to a government‑set annual maximum.

Each year, your Notice of Assessment shows your official room.

Unused room carries forward

If you don’t use all your room, it rolls forward and adds to next year’s limit. This is why it’s common for Canadians to have a large accumulated RRSP room.

Employer pensions reduce your room

If you participate in a workplace pension, your RRSP room is reduced by a pension adjustment. This is normal and shown on your Notice of Assessment.

Over‑contributions have penalties

CRA allows a small buffer, but anything beyond that can be penalized. The penalty is 1% per month on the excess amount.

If you’re close to the limit, contribute gradually and track carefully.

What counts as an RRSP contribution?

• Personal deposits
• Spousal RRSP contributions (if you’re the contributor)
• Lump‑sum deposits

Transfers between RRSPs don’t create new contributions.

Why contribution planning matters

RRSP contributions can reduce taxable income, but only if you contribute the right amount at the right time.

A contribution plan helps you:

• Maximize tax benefits
• Avoid penalties
• Spread contributions evenly across the year

Your next step

Check your official room in CRA My Account or your Notice of Assessment, then choose a safe annual contribution target.

Final note: This is education and planning — not financial advice. Always confirm your official RRSP contribution room in CRA My Account.