2024 RRSP Contribution and Deduction Limit Rules (2024)

FAQs

How much can I contribute to my RRSP in 2024? ›

Your RRSP contribution limit for 2024 is 18% of earned income you reported on your tax return in the previous year, up to a maximum of $31,560. For 2023, the dollar limit was $30,780.

An RRSP deduction limit is the maximum amount of money you can contribute to your RRSP and claim as a tax deduction on your income tax return. More specifically, it's the lesser of 18% of your income from the previous year or the annual limit set by the CRA (up to a maximum of $30,780 for tax year 2023).

What if you contribute more than your RRSP deduction limit. Generally, you have to pay a tax of 1 percent per month on your contributions that exceed your RRSP deduction limit by more than $2,000.

Highlights of changes for 2024. The contribution limit for employees who participate in 401(k), 403(b), and most 457 plans, as well as the federal government's Thrift Savings Plan is increased to $23,000, up from $22,500.

For 2024, the limit is $7,000.

Your RRSP deduction limit for 2023 is based on your earned income for 2022 (and on earned income from previous years, if you had any). Since you have not filed a return yet, we have no record of your earned income from 2022 or 2023, so your RRSP deduction limit for 2023 shows as zero.

You can make a withdrawal from your RRSP any time¹ as long as your funds are not in a locked-in plan. The withdrawal, however, is subject to withholding tax and the amount also needs to be included as income when filing your taxes. There are situations in which tax-deferred withdrawals can be made from your RRSP.

However, unless you maximize your RRSP contributions every year, you will likely cheat yourself out of significant benefits at retirement. To take advantage of tax-free compounding over time, it is vital to contribute as much money every year you can and as early as possible.

Note: If your available contribution room is a negative amount (shown in brackets), you have no contribution room available for 2018 and may have over-contributed to your RRSP/PRPP. If this is the case, you may have to pay tax on any excess contributions.

What is the difference between RRSP deduction limit and unused RRSP contributions? ›

What are unused RRSP contributions? The amount of your RRSP, PRPP and SPP contributions that you could not deduct or have chosen not to deduct. This amount is carried forward to the following year and you can use it as a deduction up to your RRSP deduction limit for that year.

Your RRSP contribution limit for the current year is the lower of: 18% of your pre-tax income from the previous year or up to a maximum annual contribution limit for the taxation year.

The RRSP contribution limit set by the Canadian government.

This limit changes annually. For 2024, the maximum any Canadian can contribute to their RRSP is $31,560 (up from $30,780 in 2023). Below, you will find the contribution limits for each of the past 10 years.

Your RRSP contribution limit caps the amount of money you can invest in your registered retirement savings plan; usually, the limit is 18% of your reported income from the previous year.

The amount of new contribution room you get each year is equal to 18% of your earned income (meaning money that you work for, not investment income or government benefits you receive), up to a cap (called the allowable limit) that changes annually.

The annual TFSA dollar limit for 2024 is $7,000. The annual dollar limit is indexed to inflation.

In general, the annual benefit for a participant under a defined benefit plan cannot exceed the lesser of: 100% of the participant's average compensation for his or her highest 3 consecutive calendar years, or. $275,000 for 2024 ($265,000 for 2023; $245,000 for 2022; $230,000 for 2021 and 2020; $225,000 for 2019)

Starting in 2025, catch-up contribution limits to retirement plans such as 401(k)s for those age 60 to 63 will increase from $7,500 per year to $10,000. After 2025, the limit will be indexed for inflation. Catch-up contributions for those outside of this age range have not yet been announced by the IRS.

Spousal RRSPs come with a three-year attribution rule, which only permits withdrawals three years after the deposit date. So, for example, if you deposit funds into a spousal RRSP on January 1, 2024, your spouse or common-law partner won't be able to withdraw the funds until January 1, 2027.