2013 RRSP Contribution Limits

by Mike Holman

The maximum RRSP contribution limit for the 2012 tax year is $22,970. There are other factors in calculating the limit, so read on!

Remember that the RRSP contribution limit applies to the previous tax year.

Some rules to calculate your 2012 RRSP contribution limit

Your RRSP contribution limit will be 18% of the previous tax year earned income or the RRSP contribution limit ($22,970), 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.

Contribution room carry-forward

If you don’t use up all your RRSP contribution room, it will get carried forward forever.

Contribution room is calculated on previous year’s income

One fact which can be confusing is that the RRSP contribution room created by earned income in any given year is applied to the following tax year.  So if you made $50,000 in year 1, you can contribute $9,000 to your RRSP and claim it against your year 2 income (or any subsequent year).  You can’t claim it against the year 1 income.

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?

Check this post for RRSP contribution deadline.


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