When you file your taxes every year, Canada Revenue Agency (CRA), calculates Your personal RRSP contribution room is not a fixed number; it is calculated annually based on your income and your history of contributions.
The Calculation Formula
Each year, you earn new contribution room based on the following:
18% of your earned income from the previous year,
Up to the annual maximum set by the CRA for that tax year.
The amount you can actually contribute is:
New Room Earned + Unused Room from Previous Years – Pension Adjustments
Key Limits (2024–2026)
While the percentage (18%) stays the same, the dollar cap increases annually to account for inflation:
Tax Year | Annual Maximum Deduction Limit |
2024 | $31,560 |
2025 | $32,490 |
2026 | $33,810 |
Three Factors That Affect Your Room
Unused Room: Unlike some other benefits, RRSP room never expires. If you don't use your full limit this year, it carries forward indefinitely to future years.
Pension Adjustments (PA): If you have a pension plan through your employer (Defined Benefit or Defined Contribution), your RRSP room is reduced. This is because the government considers your pension as a form of registered retirement saving.
The $2,000 "Buffer": The CRA allows a lifetime over-contribution "grace" amount of $2,000. You won't be penalized for this, but you cannot deduct the extra $2,000 from your taxes until you have new room to cover it.
How to Find Your Exact Limit
Because of carry-forward room and pension adjustments, the only way to know your exact limit is to check your official CRA records:
Notice of Assessment (NOA): After you file your taxes each year, the CRA sends you an NOA. Look for the "RRSP Deduction Limit Statement."
CRA My Account: Log in to the CRA website to see your real-time available room.