RRSP/TFSA Contribution Room
Quick Definition
The cumulative amount you are allowed to deposit into your registered accounts.
Full Explanation
Contribution room is the maximum amount you can deposit into your RRSP or TFSA in a given year without paying an over-contribution penalty. RRSP room is 18% of your previous year's earned income (up to the annual dollar limit), minus any pension adjustment. TFSA room accumulates at the annual limit ($7,000 for 2024) for every year since 2009 when you were 18+ and a Canadian resident. Unused RRSP room carries forward indefinitely. TFSA room is restored the year after a withdrawal. Check your available room through the CRA My Account portal.
Related Terms
RRSP (Registered Retirement Savings Plan)
A tax-deferred savings account for retirement, with deductible contributions.
TFSA (Tax-Free Savings Account)
A flexible registered account where investment growth and withdrawals are completely tax-free.
FHSA (First Home Savings Account)
A new registered account combining RRSP and TFSA benefits specifically for first-time home buyers.
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