2010 RRSP Contribution Limits

Here are the RRSP contribution limits:  The year indicated is the tax year.

2009 $21,000

2010 $22,000

2011 $22,450

2012 $22,450 plus inflation index amount.

Some rules to calculate your 2010 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 2008 and makes no rrsp contributions, then after he files his taxes in 2009 then the CRA should sent him a notice of assessment which will add $18,000 of contribution room to his total.  If Johnny had made a larger salary of $200k in 2008, then the CRA will only add the rrsp contribution limit of $21,000.

Contribution room carry-forward

If you don’t use up all your RRSP contribution room then it will get carried forward forever so you can use it whenever you like (or have some money).

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.  More details to follow.

Find out about the RRSP deadline.