RRSP Deadline/Contribution Limit

For those of you coming here through Google search looking for the RRSP deadline for tax year 2018, the deadline is: March 1, 2019.  Basically 60 days into the new year.

There is an abundance of choice out there for RRSP accounts, but here is a review of the best online brokers for RRSPs.  If you’re not sure if RRSPs are right for you, check out my article on “Who Should Contribute to an RRSP?“.

Also note that your RRSP contribution limit should be on last years Notice of Assessment (NOA) or 18% of your last years earned income up to a maximum contribution of $26,230 (for 2018 tax year).

If you don’t have your NOA, then you can call Canada Revenue Agency (CRA) and they will determine your limit after a bunch of security questions. CRA also has a free online service that enables you to access your RRSP contribution limit information online. Remember that unused contribution room from previous years can be carried forward.

Here are the RRSP contribution limits for other tax years:

  • 2014 – $24,270
  • 2015 – $24,930
  • 2016 – $25,370
  • 2017 – $26,010
  • 2018 – $26,230

If you want to calculate your tax savings based on your RRSP contribution, here is what you do:

  1. Determine your marginal tax rate based on your income and province. For me personally, my marginal tax rate is: 39.3% (try taxtips for your tax rate)
  2. Multiply your total contribution for the year by your marginal tax rate and voila, you will have your approximate RRSP tax refund. Example: In 2018, if I contributed around $6,000 to my RRSP, I should get approximately: $6,000 x 39.3% = $2,358
  3. Or, you can forget the math and use an RRSP calculator that is easily found online.

Before you go running to the bank, remember, you don’t have to rush into an investment immediately. You can simply deposit money into your RRSP account, park it in a money market fund, then decide which investments to go with later. Now.. run to the bank. :)

Also, note that you can carry forward your tax deduction, so even if you are in a low-income year, you can invest now and claim the deduction during years when income is higher.

For those who have contributed to your RRSP, but don’t have enough to maximize, check out my RRSP loan strategy.  Basically, borrow enough so that your tax refund can pay off the loan balance. 

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36 Comments

  1. ThinkingAheadNow on March 3, 2015 at 10:03 pm

    Thanks for all your suggestions!

  2. ken lee on March 24, 2015 at 2:57 pm

    I forgot buy RRSP deadline 2014 ,what i can do ?

  3. Ashley on August 13, 2015 at 5:23 pm

    Hello,
    I am going to opt to take a transfer value on my government pension which I am not longer contributing toward. My inlimit will have to be locked in with a LIRA, is this separate from my allowed RRSP contribution? Can I lock my in-limit into a LIRA and my out-limit into a regular RRSP?

    Thanks,
    Ashley

  4. Ed Rempel on August 15, 2015 at 12:10 pm

    Hi Ashley,

    Yes, transferring your pension to a LIRA does not affect your RRSP contribution room – unless a portion is taxable and you choose to make an RRSP contribtution with it. In fact, it is possible you may get some RRSP contribution room back in a “pension adjustment reversal”, especially if you were not in the pension very long.

    Do you have a specific quote on how much will be transfered and whether the full amount can be transfered tax-free? The pension transfer limit relates to whether it can all be transfered tax-free or whether part of it must be taken in cash. It is dependent on the status of the pension plan.

    If a portion must be in cash, you either pay tax on it or make a direct RRSP contribution, which would use your RRSP contribution room.

    If you don’t have a quote on how much is transferable tax-free, request it before the transfer, so you can determine the best way to transfer it all.

    This transer is called “commuting a pension” and can be a complex decision with signficant pros and cons. You are giving up a lifetime guaranteed return of about 5%/year, in exchange for control of the investing, flexibility in taking income, the ability to unlock half, and being able to leave 100% of the remainder to beneficiaries.

    Ed

  5. Susan on December 30, 2015 at 2:47 am

    Just being picky but…

    You write “If you want to figure out your tax return based on your RRSP contribution”. The correct statement should be if you want to figure out your tax refund. You do state that further along in the article. And just to be super anal about it, it should be if you want to calculate your tax savings. Not everyone who makes an RRSP contribution ends up with a refund eg. Self-employed. As a former tax preparer I have seen this point bite people more than once.

    • FrugalTrader on December 30, 2015 at 1:22 pm

      Excellent point Susan, thanks for the feedback.

  6. Brian on February 27, 2016 at 1:49 pm

    My daughter has a tax bill from last year that she is paying back monthly. I wanna buy her an RRSP for this year. Does she have to have her tax bill paid before an RRSP can be bought for this year? thanks.

    • Susan on February 27, 2016 at 4:00 pm

      The quick answer is no. However you say you want to buy her an RRSP. She has to purchase this not you so I’m assuming you’re giving her money to invest. If the RRSP contribution generates a refund it will be offset against what she owes. An RRSP contribution does not necessarily guarantee a refund. It could just reduce her 2015 tax liability.

      Also you don’t “buy” an RRSP. an RRSP is like an envelope that holds various investments. While the investments are in the RRSP envelope there is no tax on earnings.

      Hope that was helpful.

  7. jp on January 3, 2018 at 2:42 pm

    hello ,

    my wife just came last year in may 2017 to canada as permanent resident and luckily she got a job , can she contribute to rrsp for year 2017 as its her first year in canada ??? ( like 18% of her total income for 2017 )

    • FT on January 3, 2018 at 5:16 pm

      Jp has your wife filed her income tax return yet? Personally I would wait for the notice of assessment from CRA before starting an RRSP.

    • Estefania Londono on February 5, 2018 at 4:13 pm

      I don’t think so. RRSP contribution room is based on the prior year’s earnings (in this case 2016) therefore she should have zero contribution room for 2017. I would wait until after submitting the 2017 taxes to see her actual contribution room for 2018.

  8. Tiziana kochenash on March 9, 2018 at 2:11 pm

    Hi I forgot to do my rrsp contribution. This rrsp I have is a home buyers plan. Would I have to pay a penalty for a missed payment. Or can I put more next year to make up for this year. My max is 1333.00

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