Get an overview of the rules and contributions limits for the Registered Retirement Savings Plan (RRSP).

If you have earned income and file an income tax return in Canada, you can contribute to an RRSP until December 31 of the year you turn 71. You must also have contribution room available, which is identified on your annual Notice of Assessment sent by the Canada Revenue Agency (CRA).

There are contribution limits on RRSPs. To find out the exact amount you can contribute for the current year, check your most recent Notice of Assessment from the CRA.

As a guideline, your allowable RRSP contribution for the current year is the lower of:

  • 18% of your earned income from the previous year
  • The maximum annual contribution limit for the current tax year
  • The remaining limit after any company sponsored pension plan contributions

Year Contribution Limit Per Year
2013 $23,820
2014 $24,270
2015 $24,930
2016 $25,370
2017 $26,010
2018 $26,230
2019 $26,500
2020 $27,230

You can contribute to an RRSP at any time. To be eligible for an RRSP deduction in a specific tax year, you must make contributions during that calendar year, or up to 60 days into the following year.

If you withdraw funds from your RRSP, you will face withholding taxes. This amount must be held back by the RRSP provider and sent to the government on your behalf. Withdrawals must also be declared as income on your tax return at the end of the year.

Effective January 1, 2018, the following withholding tax rates apply:

Amount of RRSP Withdrawal All Provinces Except Quebec Quebec
Up to an including $5,000 10% 20%
$5,000.01 to $15,000 20% 25%
More than $15,000 30% 30%

An RBC RRSP can hold a variety of investments, including Guaranteed Investment Certificates (GICs), mutual funds, portfolio solutions and savings deposits. You can also hold stocks and bonds through RBC Direct Investing™ and RBC Dominion Securities.

If you’re a member of a company-sponsored registered pension plan or deferred profit sharing plan, the amount that you can contribute to your RRSP must be reduced by the total value of the pension credits you earned for the year.

This amount is referred to as a pension adjustment (PA) and is reported on the T4 slip that you receive from your employer.

If you can’t make your maximum contribution one year, you can make up that portion of the contribution in later years by carrying it forward. The amount of your unused contribution limit is shown on your Notice of Assessment.

If you make an RRSP contribution beyond your maximum allowable amount for a year, it is considered an over-contribution. There is a lifetime allowance of $2,000 for over-contributions. These contributions must be used before any new contributions are applied. Generally, you will have to pay a penalty tax of 1% per month on excess contributions that exceed your RRSP deduction limit by more than $2,000.

You are free to transfer your RRSPs between financial institutions at any time without being subject to tax. You can also move some or all of your money between eligible investments within your RRSP.

During a separation or divorce, either you or your spouse can transfer existing RRSPs to the other, without being subject to tax, provided you are living apart when property and assets are settled, and you have a written separation agreement or court order.

In the event of death, the proceeds of your RRSP are distributed to the beneficiary named in your RRSP or Will. In general, the proceeds of the RRSP may remain tax-sheltered if they are transferred to an RRSP, Registered Retirement Income Fund (RRIF) or annuity in the name of your beneficiary, if your beneficiary is your spouse, common-law partner or financially dependent child. Otherwise, the balance of the RRSP is included as income on your final tax return.

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