Here are the RRSP contribution limits: The year indicated is the tax year.
| Year | Contribution Limit |
| 2010 | $22,000 |
| 2011 | $22,450 |
| 2012 | $22,450 plus inflation index amount |
As you can see, the maximum RRSP contribution limit for the 2010 tax year is $22,000. There are other factors in calculating the limit, so read on!
Some rules to calculate your 2011 RRSP contribution limit
Your RRSP contribution limit will be 18% of the previous tax year earned income or the RRSP contribution limit (from the table above), whichever is lower, plus any unused contribution room from previous years. Earned income basically means income you earn from a job or business (including real estate rental income). Income or dividends from investments do not create RRSP contribution room. You can find out your current “contribution room” or “deduction room” on your Notice of Assessment which you should have received from the Canada Revenue Agency (CRA) after filing your taxes last year.
For example if little Johnny made $100,000 in 2010 and makes no RRSP contributions, after he files his taxes, the CRA will send him a notice of assessment which will add $18,000 of contribution room to his total. If Johnny had made $200,000 in 2010, the CRA will only add the RRSP contribution limit of $22,000.
Contribution room carry-forward
If you don’t use up all your RRSP contribution room, it will get carried forward forever.
Maximum age for contributions
You can contribute to an RRSP for any tax years where you turn 18 or older up to a maximum of 71 years of age. You can contribute right up to the end of the year where you turn 71.
What about pension contributions?
Contributions to pension will reduce your eligible RRSP room.
When is the RRSP contribution deadline?
The RRSP deadline for 2011 (tax year) contributions is midnight of Wednesday, Feb 29, 2012.
60 day RRSP contribution rules
When you file your 2010 tax return (deadline is April 30, 2012), you have the option of claiming any RRSP contributions made during the first 60 days of the current year. In other words – any RRSP contributions made between Jan 1, 2012 and Feb 29, 2012 can be claimed on your 2011 tax return if you wish. These are known as “60 day contributions“.
How can the RRSP deadline be midnight if the stock exchanges are closed at 4:00 pm?
Good question. This deadline is very “soft” – it really represents the day you place your purchase (or at least try to place your purchase). For example if you meet with your financial advisor at 11:30 pm, March 1 in the alley behind your local Tim Hortons, that still counts as a contribution, even if he doesn’t actually buy the investment until the next day or a couple of days later.
RRSP contribution deposit date
But if the deadline is Feb 29 and the advisor makes your purchase on March 3, how can that be a 60 day contribution? The answer is the “deposit date” of the contribution. If the advisor makes the purchase on March 3, you will get the prices of March 3 (also known as the “trade date”) for your investment purchase but he/she will ensure that the deposit date is set to Feb 29, which means that the institution that is handling the investment (ie brokerage, mutual fund company) will create a 60 day RRSP contribution receipt for you and you can claim it on your 2011 tax return.
Can I just call my financial advisor on Mar 3 and tell him I meant to contribute February 29th?
Yes, you can. Although some advisors might refuse the order, I’d be willing to bet that most of them will still do the purchase for you and backdate the deposit date. Just tell them that you “forgot” or come up with some other lame excuse. More RRSP contributions mean more money in their pocket. There is a limit however, once you get a week or two past the deadline, it becomes less likely that you will be able to get a contribution receipt. The best thing is to make the contribution on time.
Is the RRSP contribution deadline always February 29th?
No, it isn’t. Here is a table of all the contribution deadlines for the next five years.
| Year | Contribution Deadline |
| 2011 | March 1 |
| 2012 | February 29 |
| 2013 | March 1 |
| 2014 | March 3 |
| 2015 | March 2 |
How is the RRSP contribution deadline calculated?
The deadline is calculated using the following steps:
- Start with Dec 31 of the previous year.
- Move forward 60 days ie Jan 1 is 1 day, Jan 2 is 2 days etc.
- If the 60th day is a weekend, keep going forward in time until the next business day.
The majority of the time, the RRSP contribution deadline is on March 1st, because most years, March 1st is during the week. You’ll notice from the table that in 2014, Mar 1 is a Saturday, so the deadline is the following Monday, March 3.
Leap years can also play a part which is why sometimes the deadline is Feb 29.
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{ 13 comments… read them below or add one }
Interesting. I’ve already maxed mine out for the year, but I never knew you could almost ‘fudge’ a few extra days past the deadline. Good to know
I have a question: last year I received an inheritance that
will allow me to max out my RRSP. I can’t use the whole tax refund
this year, as it is more than I typically earn in a year. Nor do I
want to reduce my tax bracket to one that is lower than my expected
retirement tax bracket. I understand I can put all of the money in
now, then only use the tax refund as I need it in years ahead,
indefinately. My question is: if I can’t use (or don’t want to use)
the whole tax refund before I die or buy a RRIF, what happens to
it? I don’t want to pay tax on a withdrawal that I have not
received a tax refund on. I am in my fifties, and hope to retire
early. Any help would be appreciated. Thanks.
@wendi
Good question.
If you die, your RRSP will be “cashed in” and the amount will all be counted as part of your taxable income for that year. I don’t see why any unused contribution amounts couldn’t be used to help offset that income. It’s possible that the law doesn’t work that way however.
I suspect a more likely problem would be: How would the executor know that you have unclaimed RRSP contributions? If they or your relatives don’t know about them – they will be lost for sure.
I would shoot Jim Yih an email over at http://www.wealthwebgurus.com/ (contact link is at bottom). He is the expert with estate matters.
If you don’t or can’t use the contribution room, it will just disappear. You should might want to consider planning to not put the entire amount into your RRSP if you think this is a likely occurrence. Use your TFSA as much as possible. Maybe just put a portion of the amount into the RRSP now, and then plan to put more in later.
There is no perfect way to plan this, since you can’t predict the future.
This is really informative Mike! Especially, the insight on the “soft” deadlines for RRSP contributions, it is very timely for this time of the year. As most people evaluate where they stand with their RRSP contributions, an RRSP savings calculator can be helpful in ensuring and/or getting them on board with their retirement savings goals.
Thanks for reminding me to get on with opening my self directed RRSP account! Excellent post Mike.
A great post. I wonder how much contribution rates will drop now that people are putting more money into TFSAs.
I have two questions regarding RRSP’s
a) Having started to contribute to RRSP’s (by maximizing) at the age of 42 (my age when I landed as an immigrant in Canada and started working!), will there be any real advantage for me at the time of my retirement? Currently, it helps me in reducing my taxes. However, I feel it is very beneficial to those who contribute at a much younger age say 24 considering their span of work life.
b) Is it possible to withdraw my RRSP’s at the time of retirement from any part of the world (say India) if I am then not located in Canada?
Appreciate your feedback to my above e-mail address.
@ Mike: Re – How would Wendy’s executor know about RRSP contributions that are unclaimed?
If nothing else, the executor would have to notice from the RRSP section of the tax return that either:
a) on the 20?? tax return, amount $x was contributed, amount $y was deducted and amount $z is recorded as available to future years.
b) last years return, $0 was contributed, amount $y was deducted and $0 available to future years.
Telling the executor would be best or for those who don’t want to bring their executor up to speed, leave a note highlight any tax strategies (ex. this one or leveraged investments etc.).
In theory, since the unused portion is recorded and CRA will be notified of the death, CRA should catch this. It may take while though and generate changes to the tax return.
Hi Mike
In 2010 I contributed $10 to my RSP. In 2011 during the 60 day period, I contributed another $15. All together, I’ve over contributed by $3 for tax year 2010. Can I just use the over contribution of $3 for tax year 2011 since I essentially purchased it in 2011? (RC owes me money and yes its lost interest) thanks a million and I hope you answer this during off tax season.
Hi Harvey. Yes, you can wait to claim your 2011 60-day contribution.
Is this possble? I would like to withdraw money from my rsp to pay bills. In this same year, I would like to contribute money to my rsp via the unused rsp contribution room I have…For example, I withdraw 100k from rsp to pay bills- withholding is 30%- ie 30k. When I complete my tax return for that same year, I am required to pay 44% of tax on the 100k of rsp money withdrawn- ie 44k.
After netting the witholding tax of $30k against the tax bill of $44k, I still owe 14k in taxes. But I still have 50k of unused rsp room available for carryforward. Can I take 15k out of the 50k unused rsp room as an rsp deduction to offset the 14k in taxes owed in the same taxation year?
Thank you!
Hi, I landed here as an immigrant in 2010, I got a job in January 2011 as a casual staff,but it became a permanent full-time job in May 2011.
I started an RRSP contribution in October 2011.
I just want to find out if I have not run foul of any laws.
Could I use it to for any tax-purposes?
I have a bunch of room left for RSP contributions from past years, but very little earned income. If I contribute more than my earned income, can the deduction be applied to other income?