How is RRSP contribution room calculated?

New room each year is 18% of your prior-year earned income, up to the annual dollar limit set by the CRA (32,490 CAD for 2025). You then subtract your pension adjustment and add any unused room from previous years to get your total deduction limit.

What counts as earned income for RRSP?

Earned income includes employment income, net self-employment income, net rental income, and certain other amounts like CPP disability and taxable alimony received. It does not include investment income, pensions, or capital gains.

What is the pension adjustment?

If you belong to a workplace registered pension plan or deferred profit-sharing plan, your pension adjustment (box 52 on your T4) reduces your RRSP room. It reflects the value of pension benefits you earned that year, so you do not double up on tax-sheltered savings.

How does unused RRSP room work?

Any contribution room you do not use carries forward indefinitely. Your Notice of Assessment shows the cumulative unused amount. This calculator lets you add it so you can see your full deduction limit, not just this year's new room.

Can I over-contribute to my RRSP?

There is a lifetime 2,000 CAD over-contribution buffer with no penalty, but amounts above that are taxed at 1% per month until withdrawn. This tool shows your limit so you can stay within it; the buffer is not added to the figures shown.

Canada RRSP Contribution Room Calculator

Your RRSP deduction limit is how much you can contribute and deduct from taxable income. It builds each year from your earned income, is reduced by any workplace pension you accrue, and rolls forward unused room indefinitely. This calculator brings those pieces together.

How it works

new room   = min( 18% × prior-year earned income , annual dollar limit )
net room   = new room − pension adjustment
deduction  = net room + unused room carried forward

The annual dollar limit caps high earners: 18% of income only reaches the 2025 limit of 32,490 CAD at about 180,500 CAD of earned income. The pension adjustment prevents people with generous workplace pensions from also getting full RRSP room.

Example

Prior-year earned income of 90,000 CAD gives 18% = 16,200 CAD, below the dollar limit. With a pension adjustment of 4,000 CAD and 12,000 CAD of unused room carried forward, your deduction limit is 16,200 − 4,000 + 12,000 = 24,200 CAD.

Notes

Figures here are an estimate; your CRA Notice of Assessment is authoritative and already nets out pension adjustments. The 2,000 CAD lifetime over-contribution buffer is deliberately not added so the figure shown stays the safe maximum.