RRSP Contribution Limits, Deadlines & Tips

RRSP Contribution Limits, Deadlines & Tips-When it comes to conserving money and minimizing your tax bill each year, RRSPs are a great option. Your annual tax bill will go down since every dollar you put in reduces your taxable income for the year. Meanwhile, your RRSP contributions will earn compound interest year after year.

You can start saving for your retirement in a tax-advantaged manner by opening a Registered Retirement Savings Plan (RRSP). However, there are a number of guidelines to follow to make the most of this account. What follows is essential information regarding RRSP deposits.

Canadians are urged to start putting money away in a Registered Retirement Savings Plan (RRSP) as soon as they are eligible to do so. If implemented correctly, a Registered Retirement Savings Plan (RRSP) can be a powerful instrument for saving for old age.

The deadline for contributing to your RRSP, the maximum amount you can contribute, penalties for early withdrawal, and other restrictions all apply because your RRSP is a government-registered account. To help you make the most of your RRSP, this primer will cover the fundamentals of the plan.

What is a Registered Retirement Savings Plan (RRSP)?

A registered retirement savings plan is one that has been set up with the Canada Revenue Agency. You can put money in it to save or invest in things like bonds, stocks, and mutual funds. Anyone younger than 71 can apply for it.

A significant benefit of RRSPs is that contributions are not considered taxable income in the year they are made. With an annual contribution of $6,000 and a salary of $56,000, your taxable income for the year will be reduced to $50,000.

Although your total taxable income will be smaller with an RRSP, you will still be able to reduce your tax rate. This is due to the fact that in Canada, different income levels are taxed at varying percentages.

In Canada, for instance, in 2018, if your income is less than $50,197, you’ll pay a rate of 15% in taxes on it, and if it’s between $50,198 and $100,392, you’ll pay a rate of 20.5% in taxes.

To continue with the previous example, you will pay a reduced effective tax rate because you eliminated $6,000 from your taxable income this year.

When is the RRSP deadline?

RRSP contributions are based on a different tax year than the one used for calculating income and deductions in 2022 (January 1–December 31).

Date Range: March 2–December 31, 2022

From January 1 to March 1, 2023

This asymmetrical pattern is also known as the “first 60 days rule,” which states that any contributions to an RRSP made within the first 60 days of the year must be reported on the tax return for the prior year.

Tax consequences of missing the RRSP deadline

For RRSP contributions made between March 2 and December 31, 2022, and between January 1 and March 1, 2023, you will receive two different receipts. On your 2022 tax return, you must include both of these deductions. Don’t file your taxes until you get the second tax slip if you make an RRSP contribution in the first 60 days of 2023.

You must report 2022 RRSP contributions made in the first 60 days of 2023 on your 2022 tax return, but you are not required to take a tax deduction for the contributions. As an alternative, you may choose to add the amount to your tax return for 2023.

In fact, regardless of when RRSP contributions are made, the “carry forward” provision remains available. Even if you don’t have to itemize your deductions for the current tax year, you must report these donations on your tax return in the year you make them. You can deduct the amount that was contributed but not used from taxes in a subsequent tax year, and it will show up as “unused RRSP contributions” on your notice of assessment.

If you expect to be in a higher tax band in the future and are looking for ways to reduce your taxable income, you may want to consider carrying forward unused contributions.

Frequently Asked Questions About RRSP Contributions

1.    In what ways am I able to max out my RRSP?

The maximum amount you can contribute is not something you need to do complicated calculations on. The Canada Revenue Agency (CRA) can give you access to this data. Your RRSP contribution limit can be found on your most recent assessment notice from the CRA (or, if it has changed, the CRA will send you a revised RRSP limit on Form T1028).

You can also check your RRSP deduction limit by logging into the CRA’s My Account service online or through the app. This cap incorporates any accumulated balance from prior years’ contributions.

2.    What happens if I overdo it with my contributions?

When you put more money into your RRSP than you should, it’s called an excess contribution, and you’ll likely have to pay tax on it. If you have contributed more than $2,000 over the limit, you will owe a tax of 1% every month on the excess amount. A withdrawal or contribution of the excess amount to a qualified group plan will avoid the tax.

3.    Do tax breaks apply to RRSP contributions?

Yes. You can reduce the amount of tax you owe the federal government by contributing to an RRSP since the amount you contribute can be subtracted from your taxable income. You can spread out your deductions across several years instead of having to make them all at once. You have the option of deferring all or part of your RRSP contributions until a later tax year.

In general, these tax breaks are more beneficial the higher your income and tax level. If your tax rate is low now, it may be wise to put off taking deductions for charitable contributions until you have a bigger income and a higher tax rate.

You are still required to provide the full contribution amount when filing your annual taxes; however, the CRA will keep track of any contributions that are not deducted and include that information in your notice of assessment.

4.    How about if I don’t have enough money to contribute the maximum to my RRSP?

There is no set minimum amount that must be put into an RRSP each year, so your contribution limit is simply the highest you’re allowed to put in. And if you don’t use all of your annual contribution limit in a given year, you won’t lose it. This allotment will be carried over to the following calendar year.


Canadians who are looking to save for the future should think about opening a registered retirement savings plan (RRSP). There are a lot of restrictions to keep in mind, such as the RRSP deadline, contribution limits, and more, so it’s important to take the time to learn how it works. An RRSP can seem complicated at first, but once you learn the fundamentals, you’ll have no trouble putting money away for your golden years.

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