Is RRSP contributions the same as cpp contributions on my T4? (2024)

FAQs

Is RRSP contributions the same as cpp contributions on my T4? ›

RRSP and CPP contributions are not the same thing. CPP stands for Canada Pension Plan contributions that are automatically deducted from your pay. RRSP stands for Registered Retirement Savings Plan contributions that you would set up with your financial institution.

The employer's RRSP contribution is a taxable benefit. Enter code 40 in the “Other information” area and the corresponding amount in one of the boxes. Include this amount in box 14 on the employee's T4 slip.

Your unused RRSP contributions from previous years are shown on My Account for Individuals, your RRSP Deduction Limit Statement in your latest notice of assessment or notice of reassessment, or on Form T1028, Your RRSP Information for 2023.

How does it work? Because you are contributing to the PSPP, a registered pension plan, the value of the PA will reduce your RRSP contribution room in the next calendar year. For example, if your PA was $5,000 for 2023, your 2024 RRSP contribution room will reduce by that same amount.

If your company pension plan is a DCPP, it's similar to an RRSP, except the RRSP has these benefits: You choose the financial institution and type of plan to save with. You can make taxable withdrawals at any time with no penalty. You can contribute to your spouse's RRSP and vice versa.

All your RRSP information—including contributions made, earned, carried forward, deducted, and your total contribution room for the coming year—can be found on the Notice of Assessment you receive from the CRA, or online in your CRA My Account.

For contributions made in the first 60 days of the following year, you will receive a separate RRSP Contribution Receipt for each contribution. Any withdrawals are fully taxed as income. You will receive a T4RSP for the exact amount withdrawn from an RRSP.

You do not have to deduct an RRSP contribution either, even if you have sufficient room. Claiming that the contribution was made and choosing to deduct that contribution are two different things.

If you have mistakenly over-contributed to your RRSP, fill out a T3012A form and submit it to the CRA. It explains your over contribution and makes a request to withdraw the excess amount.

Does CPP count as RRSP? ›

RRSP and CPP contributions are not the same thing. CPP stands for Canada Pension Plan contributions that are automatically deducted from your pay. RRSP stands for Registered Retirement Savings Plan contributions that you would set up with your financial institution.

Your employer's contributions to your group RRSP are considered as earned and taxable income. However, just like an individual RRSP, contributions towards a group RRSP are also tax-deductible.

Your contribution limit is the amount you are able to deposit into your RRSP in a given year. Every year, you build “contribution room” equal to the lesser of 18% of your income or the yearly max. Any amount you do not contribute carries forward indefinitely and will be added to your maximum contribution amount.

Defined contribution pension schemes

These are usually either personal or stakeholder pensions. They're sometimes called 'money purchase' pension schemes.

A defined benefit pension is a type of workplace scheme that gives you a guaranteed income for life, whereas a defined contribution pension depends on how much you and your employer pay in and the performance of the underlying investments. Pensions are long term investments.

The Canada Pension Plan (CPP) retirement pension is a monthly paid benefit that replaces part of your income when you retire. Employees and employers contribute to CPP. Contributions to CPP are compulsory for all working Canadians aged 18-70.

Deductible RRSP contributions can be used to reduce your tax. Any income you earn in the RRSP is usually exempt from tax as long as the funds remain in the plan. You generally have to pay tax when you receive payments from the plan.

In general, RRSP contributions are not tax-deductible in the U.S. like they are in Canada. However, contributions to certain company-sponsored group RRSPs are deductible in the U.S. under the Treaty. Contributions made to your RRSP are not subject to U.S. gift tax.

Yes! Your individual and your employer contributions count toward the maximum RRSP contributions per year.