Your RRSP deduction limit is the most you can deduct for contributions to your RRSPs, PRPP, SPP and your spouse's RRSP or SPP for the year. As of October 2026, the CRA generally works it out as your unused room from last year plus 18% of last year's earned income (capped at $32,490 for 2025 and $33,810 for 2026), minus any pension adjustment.
If you've got a workplace pension, that last part matters a lot, because it can shrink your room sharply. Everything here comes from the CRA's RRSP pages and its published limits table.
The CRA formula
| Step | What it means |
|---|---|
| Unused RRSP deduction room at the end of last year | Room you didn't use in earlier years carries forward |
| Plus the lesser of 18% of last year's earned income or the annual RRSP limit | The new room for this year |
| Minus your pension adjustment (PA) or prescribed amount | Workplace pension saving reduces your RRSP room |
| Plus any pension adjustment reversal (PAR) | Adds room back where a PAR applies |
| Minus any net past service pension adjustment (PSPA) | Reduces room where a PSPA applies |
Your notice of assessment shows the result. To do it yourself, the CRA points you to chart 3 of Guide T4040.
The annual RRSP dollar limits
| Year | RRSP dollar limit |
|---|---|
| 2022 | $29,210 |
| 2023 | $30,780 |
| 2024 | $31,560 |
| 2025 | $32,490 |
| 2026 | $33,810 |
| 2027 | $35,390 |
Those are the CRA's published figures as of October 2026. The 18% test uses the previous year's earned income, so someone with steady earnings only hits the cap once their income is high enough for 18% of it to pass the limit.
The deadline
Contributions made from March 4, 2025 to March 2, 2026 qualified for a deduction on your 2025 return. March 2, 2026 was the 2025 deadline, according to the CRA's important dates page. You can contribute to your own RRSP until December 31 of the year you turn 71, and to your spouse's or common-law partner's RRSP until December 31 of the year they turn 71.
The $2,000 buffer, and what happens past it
You won't be taxed for going slightly over. The CRA charges a tax of 1% per month on unused contributions that exceed your deduction limit by more than $2,000. The buffer is only available if you were 18 or older at any time in the year the CRA specifies (2024, for the 2025 rules).
- The 1% applies every month the excess stays in.
- You may avoid it if you withdraw the excess before the end of the month it was made.
- Withdrawing the excess under the Home Buyers' Plan or Lifelong Learning Plan doesn't necessarily stop the tax.
- If you owe it, file Form T1-OVP and pay within 90 days after the end of the year you had the excess.
With the T1-OVP, send documents showing the exact months of every contribution and withdrawal. The CRA notes that RRSP receipts and T4RSP and T4RIF slips don't show this, so you'll need statements.
What you can and can't deduct
| You can deduct | You can't deduct |
|---|---|
| Contributions to your own RRSP, PRPP or SPP | RRSP administration fees |
| Contributions to your spouse's or common-law partner's RRSP or SPP | Brokerage fees inside a trusteed RRSP |
| Unused contributions from a previous year | Interest on a loan taken out to contribute |
| Capital losses inside the RRSP, and employer contributions to your PRPP |
Repaying amounts you took out under the Home Buyers' Plan or the Lifelong Learning Plan isn't treated as a deductible contribution either. Special rules apply instead.
What doesn't use up your room
Amounts transferred directly into your RRSP from certain other plans don't affect your deduction limit, although you may need to include an amount in income and claim an offsetting deduction. Certain kinds of qualifying income transferred to your RRSP are excluded from the calculation altogether.
Your notice of assessment or reassessment will flag that you may owe the 1% tax if your unused contributions are over your limit. For excess contributions from earlier years that are still subject to tax, the CRA's simplified T1-OVP-S return can be used for each year affected.
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After a death
No one can contribute to a deceased person's RRSP after the date of death. The legal representative can contribute to the surviving spouse's or common-law partner's RRSP or SPP in the year of death or within 60 days after the year ends, and claim it on the deceased person's final return, up to their deduction limit for that year.
How earnings and payroll fit in
Your pension adjustment is reported by your employer on your T4 slip. Because the new room is based on the previous year's earned income, a change in what you earn this year changes next year's room. The CRA's limits table also shows the YMPE used for CPP contributions: $74,600 for 2026.
RRSP room vs TFSA room
The two work very differently, which is why people mix them up. RRSP room depends on your earned income, 18% of the previous year's up to the annual cap, and shrinks if you're in a workplace pension. TFSA room doesn't depend on income at all: it's a flat annual dollar limit for every resident aged 18 or over, and withdrawals come back as new room the following January. RRSP contributions are deducted from income; TFSA contributions aren't. Check the room on both before you decide where this year's savings go.
The verdict
Check your notice of assessment before you contribute, not your bank's suggestion. If you're in a workplace pension, expect the pension adjustment to cut your room. Stay within the $2,000 buffer, and if you overshoot, take the excess out quickly or file the T1-OVP within 90 days of year end.
Frequently asked questions
What is the RRSP limit for 2026?
As of October 2026 the CRA's RRSP dollar limit for 2026 is $33,810, and your room is the lesser of that or 18% of your 2025 earned income, adjusted.
How much can I over-contribute to my RRSP?
Up to $2,000 above your deduction limit without the 1% monthly tax, if you meet the age condition.
Where do I find my RRSP deduction limit?
On your latest notice of assessment or reassessment, or Form T1028, or in your CRA account.
Does my workplace pension reduce my RRSP room?
Yes. Your pension adjustment is subtracted when the CRA works out your deduction limit.
