How is RRSP contribution room calculated in Canada?

Your new room each year is 18% of your previous year's earned income, up to an annual dollar limit ($33,810 for 2026), minus any pension adjustment from a workplace pension. Unused room from earlier years carries forward and adds to this.

Can I contribute to both an RRSP and an FHSA in the same year?

Yes. They are separate accounts with separate limits, and both contributions are tax-deductible. The FHSA adds up to $8,000 a year, with carry-forward up to $16,000 in one year and a $40,000 lifetime limit, on top of your RRSP room.

How much tax will an RRSP contribution save me?

Roughly your contribution multiplied by your marginal tax rate. Contribute $10,000 at a 30% marginal rate and you save about $3,000 in tax. The higher your income, the more each dollar of contribution is worth.

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

If you belong to a workplace pension, the value of what you and your employer put in that year is reported as a pension adjustment (Box 52 on your T4). The CRA subtracts it from your new RRSP room so pension members and non-members get comparable total room.

Is the FHSA better than the RRSP Home Buyers' Plan?

For most first-home buyers, the FHSA is simpler and often better: the withdrawal is tax-free and never has to be repaid. The Home Buyers' Plan lets you borrow from your RRSP but you must repay it over 15 years. Many people use the FHSA first, then the HBP if they need more.

Tools & Resources

RRSP Optimizer

Knowing your contribution room is half the picture. The other half is what that room is worth. This optimizer works out exactly how much you can put into your RRSP and FHSA this year, then shows the move that matters most: how much tax filling that room hands back to you. Room first, refund second, the optimal contribution clear by the end.

Your Income

RRSP room is based on your earned income from last year. For most people on a salary, that is close to your gross pay.

Annual Earned Income (gross)

Province

RRSP Details

Find these two numbers on your latest CRA Notice of Assessment, or in My Account.

Unused RRSP Room Carried Forward

Room you accumulated in past years but never used. Defaults to zero.

Pension Adjustment (if you have a workplace pension)

Box 52 on your T4. It lowers your new RRSP room. Leave at zero if you have no pension.

FHSA Details

The First Home Savings Account is also tax-deductible, like an RRSP, but the withdrawal for a first home is tax-free, like a TFSA.

Do you have an FHSA open?

Room only starts building the year you open it. Even a $1 deposit starts the clock.

FHSA Contributed So Far (lifetime)

Counts against the $40,000 lifetime limit.

Unused FHSA Room Carried Forward

You can carry up to $8,000 of unused FHSA room into the next year (max $16,000 in one year).

Your Contribution Room This Year

RRSP room

FHSA room

Combined deductible room

If You Max It Out

Estimated tax refund

Your marginal rate

After-refund cost

Per month to max it

How the Room Is Built

Line	Amount

RRSP room is 18% of last year's earned income, capped at the annual dollar limit, minus your pension adjustment, plus any unused room carried forward. The refund estimate compares your income tax with and without the deduction. It is an estimate, not tax advice.

RRSP, FHSA, or both?

If you are saving for a first home, the FHSA is usually the first place to look: you get the RRSP-style deduction now and a TFSA-style tax-free withdrawal later. It is the rare account with no catch.

For retirement, the RRSP deduction is worth the most when your income is high. If you are early in your career and in a low bracket, a TFSA often beats an RRSP. The RRSP vs TFSA tool walks through it.

The refund is not free money

A refund feels like a windfall, but it is really your own deferred tax coming back. The wise move is to reinvest it, put it toward debt, or contribute it again next year. Spending the refund quietly undoes the discipline that earned it. Steward the return, do not just enjoy it.

Tools Dan uses

Open an RRSP or FHSA

Room is only useful once you fill it. Wealthsimple opens an RRSP, FHSA, or TFSA in minutes with no minimum, so you can start with whatever you have this month.

Open a Wealthsimple account →

Affiliate link, no cost to you. How this works. See the full list of tools Dan recommends.

Go deeper

FHSA planner to map your first-home savings year by year.

Full tax calculator to model RRSP, FHSA, dividends, and credits together.