What counts as earned income for RRSP room?

Salary and wages, net self-employment income, net rental income, taxable spousal support you receive, and research grants. It does not include investment income, capital gains, pension income, CPP, OAS or EI benefits. So a year with no job and only investment income creates no new room.

Do I lose RRSP room if I do not use it?

No. Unused room carries forward for life and appears on every notice of assessment as your unused RRSP deduction room. You can also contribute now and wait to deduct in a higher-income year, which gives a bigger refund.

What is a pension adjustment and why does it shrink my room?

A pension adjustment is the CRA's value for the benefit you earned in a workplace pension last year. It appears in box 52 of your T4. Because the pension is tax-sheltered saving too, that value is subtracted from your new RRSP room so everyone gets a similar total.

Is the $2,000 cushion a yearly allowance?

No, it is a lifetime cushion for people 18 and over. You can be over your limit by up to that amount without penalty tax, but you cannot deduct the extra until new room arrives, and once used the cushion is gone. Under 18, there is no cushion at all.

How do I fix an over-contribution?

Withdraw the excess as soon as you can and file form T1-OVP for each year it was in the account, within 90 days after the end of the year, with the penalty tax. You can ask the CRA to waive the tax if the excess was a reasonable error and you are fixing it. Form T3012A lets the bank pay the withdrawal out without withholding.

How does the first 60 days rule work?

A contribution made in January or February, or up to the deadline in early March, can be deducted on the previous year's return or the current one. It still counts against the limit of the year you deduct it in. The calculator counts a first-60-days deposit for 2026 if you say you will use it that way.

Is RRSP room the same as TFSA room?

No. TFSA room is the same fixed amount for every adult resident and does not depend on income. RRSP room is 18% of earned income up to a cap, less any pension adjustment, so it varies by person. The two are tracked separately and using one does not affect the other.

RRSP Contribution Room Calculator (Canada, 2026)

Find out how much you can still put into your RRSP for 2026. Start from the deduction limit on your notice of assessment, or build it from last year's earned income and your pension adjustment. The calculator shows the room left, whether you are over, and the penalty tax if you are.

You can still contribute for 2026$20,000Your 2026 deduction limit is $20,000 and you have used $0. Deposits up to March 1, 2027 (expected, the first 60 days of 2027) can count for 2026.

Deduction limit for 2026 (notice of assessment)	$20,000.00
Contributed for 2026	− $0.00
Room left	$20,000.00

The notice of assessment figure already includes your unused room, last year's earned income and any pension adjustment. Only add what you have contributed since. Next year's new room depends on 2026 earned income and the 2027 pension adjustment, which the CRA works out after you file.

Show the math

New room each year = 18% × last year's earned income, up to the dollar limit ($33,810 for 2026, $35,390 for 2027), minus the pension adjustment, plus any pension adjustment reversal, minus any past service pension adjustment. Your deduction limit = that new room + unused room carried forward. Room left = deduction limit − contributions counted for the year. If contributions exceed the limit by more than $2,000 (a lifetime cushion, not a yearly one), a tax of 1% a month applies to the part above the cushion for every month it stays in, reported on form T1-OVP. Contributions in the first 60 days of 2027 (by March 1, 2027, expected) can be deducted for 2026 or carried forward. Dollar limits: 2019 $26,500, 2020 $27,230, 2021 $27,830, 2022 $29,210, 2023 $30,780, 2024 $31,560, 2025 $32,490, 2026 $33,810, 2027 $35,390.

How this calculator works

Your RRSP deduction limit is the most you can deduct for the year. The CRA prints it on your notice of assessment each spring and shows it in My Account. If you have that figure, use the first mode: enter it, enter what you have contributed since, and the calculator does the rest.

If you do not have it, or want to check it, the second mode builds it the way the CRA does. New room for 2026 is 18% of your 2025 earned income, capped at the 2026 dollar limit of $33,810. From that the CRA subtracts your pension adjustment, the value of what you earned in a workplace pension, and adds any pension adjustment reversal from leaving a plan. Your deduction limit is that new room plus all the room you never used in earlier years.

Room left is the deduction limit minus what you have contributed for the year. Contributions in the first 60 days of 2027 count for 2026 if you deduct them on the 2026 return. The deadline is expected to be March 1, 2027. The CRA had not confirmed the date when this page was verified.

If you contribute more than the limit, you are over. The CRA gives a lifetime cushion of $2,000. Only the part of the excess above that cushion is taxed, at 1% for every month it stays in the account.

RRSP dollar limits by year

Year	Dollar limit	Earned income needed to reach it
2019	$26,500	$147,222
2020	$27,230	$151,278
2021	$27,830	$154,611
2022	$29,210	$162,278
2023	$30,780	$171,000
2024	$31,560	$175,333
2025	$32,490	$180,500
2026	$33,810	$187,833
2027	$35,390	$196,611

The third column is the limit divided by 18%. Earn more than that and the dollar limit, not your income, sets your new room.

Worked example: $80,000 earned income with a workplace pension

Someone earned $80,000 in 2025, had a pension adjustment of $3,000 on their T4, carried $5,000 of unused room into 2026, and has contributed $10,000 so far.

Step	Amount
18% of $80,000	$14,400.00
Pension adjustment	− $3,000.00
New room for 2026	$11,400.00
Unused room from earlier years	+ $5,000.00
Deduction limit for 2026	$16,400.00
Contributed so far	− $10,000.00
Room left	$6,400.00

They can still contribute $6,400 for 2026. If they earn $90,000 in 2026, next January brings $16,200 of new room before any 2026 pension adjustment is subtracted.

Worked example: over the limit by $3,500

Someone with a $20,000 deduction limit contributed $23,500 and left it in for four months. The excess is $3,500. The first $2,000 sits inside the lifetime cushion. The remaining $1,500 is taxed at 1% a month, so four months costs $60.00. Small, but it keeps growing every month until the excess comes out, and it needs a T1-OVP return.

Assumptions

Earned income is the CRA definition. Investment income, pension income and benefits do not count.
The 2027 deadline is expected, based on the 60-days-after-year-end rule. Confirm it on the CRA site before you rely on it.
The next-year preview ignores the 2026 pension adjustment, which the CRA only knows once your 2026 T4 is filed.
The penalty is worked out on the excess you enter for the months you enter. The CRA measures it month by month on the highest excess, so a changing balance can differ slightly.
Group RRSP and pooled pension contributions through payroll count as your contributions. Employer matches to a group RRSP count too.

Common questions

Frequently asked questions

What counts as earned income for RRSP room?: Salary and wages, net self-employment income, net rental income, taxable spousal support you receive, and research grants. It does not include investment income, capital gains, pension income, CPP, OAS or EI benefits. So a year with no job and only investment income creates no new room.
Do I lose RRSP room if I do not use it?: No. Unused room carries forward for life and appears on every notice of assessment as your unused RRSP deduction room. You can also contribute now and wait to deduct in a higher-income year, which gives a bigger refund.
What is a pension adjustment and why does it shrink my room?: A pension adjustment is the CRA's value for the benefit you earned in a workplace pension last year. It appears in box 52 of your T4. Because the pension is tax-sheltered saving too, that value is subtracted from your new RRSP room so everyone gets a similar total.
Is the $2,000 cushion a yearly allowance?: No, it is a lifetime cushion for people 18 and over. You can be over your limit by up to that amount without penalty tax, but you cannot deduct the extra until new room arrives, and once used the cushion is gone. Under 18, there is no cushion at all.
How do I fix an over-contribution?: Withdraw the excess as soon as you can and file form T1-OVP for each year it was in the account, within 90 days after the end of the year, with the penalty tax. You can ask the CRA to waive the tax if the excess was a reasonable error and you are fixing it. Form T3012A lets the bank pay the withdrawal out without withholding.
How does the first 60 days rule work?: A contribution made in January or February, or up to the deadline in early March, can be deducted on the previous year's return or the current one. It still counts against the limit of the year you deduct it in. The calculator counts a first-60-days deposit for 2026 if you say you will use it that way.
Is RRSP room the same as TFSA room?: No. TFSA room is the same fixed amount for every adult resident and does not depend on income. RRSP room is 18% of earned income up to a cap, less any pension adjustment, so it varies by person. The two are tracked separately and using one does not affect the other.

Sources

Every figure on this page comes from one of these primary sources. Data last verified September 7, 2026.

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Data verified for tax year 2026: September 7, 2026 Updated September 17, 2026 By Nishant Malik, founder of GlassLayer