# RRSP Deadline & Contribution Limit 2017/2018

For those of you coming here through Google search looking for the RRSP deadline for tax year 2017, the deadline is: March 1, 2018.  Basically 60 days into the new year.

There is an abundance of choice out there for RRSP accounts, but here is a review of the best online brokers for RRSPs.  If you’re not sure if RRSPs are right for you, check out my article on “Who Should Contribute to an RRSP?“.

Also note that your RRSP contribution limit should be on last years Notice of Assessment (NOA) or 18% of your last years earned income up to a maximum contribution of \$26,010 (for 2017 tax year).

If you don’t have your NOA, then you can call Canada Revenue Agency (CRA) and they will determine your limit after a bunch of security questions. CRA also has a free online service that enables you to access your RRSP contribution limit information online. Remember that unused contribution room from previous years can be carried forward.

Here are the RRSP contribution limits for other tax years:

• 2014 – \$24,270
• 2015 – \$24,930
• 2016 – \$25,370
• 2017 – \$26,010

If you want to calculate your tax savings based on your RRSP contribution, here is what you do:

1. Determine your marginal tax rate based on your income and province. For me personally, my marginal tax rate is: 39.3% (try taxtips for your tax rate)
2. Multiply your total contribution for the year by your marginal tax rate and voila, you will have your approximate RRSP tax refund. Example: In 2014, I contributed around \$6,000 to my RRSP, so I should get approximately: \$6,000 x 39.3% = \$2,358
3. Or, you can forget the math and use an RRSP calculator that is easily found online.

Before you go running to the bank, remember, you don’t have to rush into an investment immediately. You can simply deposit money into your RRSP account, park it in a money market fund, then decide which investments to go with later. Now.. run to the bank. :)

Also note that you can carry forward your tax deduction, so even if you are in a low income year, you can invest now and claim the deduction during years when income is higher.

For those who have contributed to your RRSP, but don’t have enough to maximize, check out my RRSP loan strategy.  Basically borrow enough so that your tax refund can pay off the loan balance. One strategy is to use a 12 months 0% interest credit card to fund the RRSP loan, then use the tax refund to pay back the credit card.

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About the author: FT is the founder and editor of Million Dollar Journey (est. 2006). Through various financial strategies outlined on this site, he grew his net worth from \$200,000 in 2006 to \$1,000,000 by 2014. You can read more about him here.

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• Lori Scott February 11, 2011, 1:12 pm

Just wondering why the RRSP deadline is March 01, 2011 and the T4 deadline for employers to have them in the mail is February 28, 2011…Why do they not allow a larger gap??

• sunny February 19, 2011, 11:56 pm

Hi Frugal
I have a question here:
I will contribute to my RRSP account for the first time in 2011 for the tax yr 2010. I have always leaned about the restrictions on withdrawal from RRSP and are subject to certain conditions such as first time home buyers etc.
If I choose to withdraw in futures years; accounting withdrawals as income in the corresponding tax year, whether this kind of withdrawal is allowed by CRA ??

• FrugalTrader February 20, 2011, 12:28 am

@sunny, yes you can withdraw from your RRSP but in addition to paying tax as income,you’ll lose the contribution room. Here is an article with more details: how rrsp withdrawals work

• Chris February 27, 2011, 6:43 pm

Firstly, I love your site, I’ve been following it for about 3 years now.

I typically do my taxes online before Mar 1, but don’t submit them, just see if I’ll owe or not, and if so, then I’ll purchase RRSP’s to offset that, however, I’ve always gone in to the bank to do so, if I purchase RRSP’s online (through TD Canada Trust in this case) are you typically issued all the information you need right there on the spot? So long as my purchase of an RRSP today or tomorrow counts as being purchased before March 1st, I’m happy.

Thanks,

Chris

• FrugalTrader February 27, 2011, 9:33 pm

@Chris, Thanks for the kind feedback. About your question, if you transfer money to your RRSP online, I do not believe they issue any information. You are expected to know what your contribution limits are. My understanding is that you have all day on March 1 to make your contribution.

• Chris February 27, 2011, 10:08 pm

• Jaden September 7, 2011, 4:19 am

Hey Guys,
Question, If i have unused RRSP contribution from previous years, and have cash from unregistered investments on-hand, can i dump that All In- in one year- and reclaim taxes that i have paid in the Previous 5-10 years. Or does it just lower my current years income to receive tax paid from current year. IE: May only want to lower income to lower tax bracket for this year and not wipe income out to lose tax benefit for future years.

Example; contribution limit for 2011 80,000
annual income 70,000
cash 100,000

any ideas on a good strategy? Also considering the Smith Maneuver. Good posts here on that! Thanks guys!

• sunny September 7, 2011, 1:11 pm

As far as I know, you can dump your investment anytime into RRSP (knowing your RRSP limit) during the current year, and claim part of taxes for this year.
You cannot claim for any taxes paid in the previous year.

If you invest all of your money in one year (in rrsp), then you will likely feel the pinch on taxes in futures years

• Jim Schultz November 3, 2012, 3:24 am

Never certain on this one .Hopefully someone can clarify. Can I use past un used contributions and then deduct this amount from my taxable income.

My notice of assessment says my 2011 deduction limit is \$9224
plus
18% of earned income of \$46014 = \$8282 minus \$3525 pension adjustment =

\$4757. \$9224 +\$4757 = \$13,981…. is this the amount Im allowed to deduct?

I always thought the maximum DEDUCTION was 18% but you could of course
contribute past amounts. Have I misunderstood this all these years? Please someone help! THANKS

• Mich December 6, 2013, 12:49 pm

Does this mean that all contributions up to 1 March 2014 are considered 2013 contributions?

For example, lets say I contribute on 1 February 2013. But I want this to be a 2014 contribution (lets say I have maxed out my 2013 contribution limit). Can I do this – as long as I don’t include it as a contribution on my 2013 tax return but on my 2014 return instead?

• Ed Rempel December 8, 2013, 1:51 am

Hi Mich,

No, it doesn’t. You should include all contributions up to March 3, 2014 (not March 1, since it’s a Saturday) on your 2013 tax return, but then you can choose to deduct any amount between zero and the total you contributed.

If you want to carry forward your Feb.1 contribution, claim it on the return, but then do not deduct the amount.

Ed

• Kebe March 29, 2014, 10:55 pm

Hi all,
I forgot to claim few cash I kept in my RRSP in 2012. Now I am filling my tax return 2013 by my self. This year I bought new house and I am filling my tax return for the first time. I did not put any RRSP in 2013. Do I need to put the 2012 RRSP in 2013? very confused and I am new to Canada too.

• sunny March 31, 2014, 12:48 am

@kebe,
It should not be hard tax-filing by oneself in the situation as you are in.
Pl try to understand there are these figures for RRSP account:
1. RRSP Room from past years
2. RRSP created in the 2013.
3. Previous contribution – not claimed & claimed. Keep track
4. Contribution in 2013.
5. If you have not filed until, you can claim and withdraw for your first house buying.

I do not know if you have completed house-buying transaction, and if you have not withdrawn anything from RRSP?
If you have already withdrawn from RRSP, then that is a loan from RRSP account which you must repay every year proportionately.

• Martin February 22, 2015, 2:36 am

Hi,
I migrated to Canada 3 years back.I was not sure what RRSP really meant before reading this article. Very useful information.Thanks.I never contributed to RRSP so far. I was not aware of it and even if I was aware I wouldn’t be able to contribute because I never had any savings.I make only \$15000 a year.
My RRSP deduction limit is showing \$8400.I know the benefits of contributing to RRSP. Is there any consequence(mean penalty)if I don’t contribute?Suppose I never contribute in my entire career, will government take any action against me?

• sunny February 22, 2015, 4:55 pm

@ Martin,
There is no penalty for not contributing into your RSP account.
It will just affect how well we will survive after retirement.
RSP account is the CRAs promotion to encourage people to save money for their post-retirement. Saving in RSP will save on taxes – this is what everybody knows, but once your income increases & get into bigger tax bracket (and which will grow heavier and heavier), you will be tempted to open RSP account(s). That will force you reduce your expenses and save for tomorrow.

• Martin February 23, 2015, 6:07 pm

Thanks for the reply.It really is good saving for retirement.But in my home country we have some what same thing thing like RRSP.Buts its more beneficial.We can take loan from its for emergency & repay it later.So parents take loan for daughters wedding, kids education, hospital expenses etc.Any emergency you get loan and as far as I know there is no limit.Here they give only for buying home first time(that too max \$25000.) and also for your/spouse education.That I feel bad.Suppose I have a big saving in my RRSP and I need some money for family emergency I wont be able to use it.That will be a pathetic situation.You have savings but wont be able to use it.I can use it only after my retairement. I am not sure whether I will be alive till 65 or 70.Now if I save in RRSP sacrificing my basic needs may be I will die before retirement.So better to live well now than save for retirement.Of course if I am well settled and I am in a higher tax bracket its worth the savings.Higher income more tax saving.

• ThinkingAheadNow March 1, 2015, 8:21 pm

Hi!
I recently changed jobs and had to decide what to do with my HOOPP funds. I am 29 years old and I opted to transfer my 10+ years of contributions into a combination of \$85000 LIRA and \$23000 RRSP (2014 contributions, in the hopes of using the tax break towards a vehicle), but I have since been warned about how this action will affect my taxes for 2015 given that this is considered \$23000 additional untaxed income for this year. Although I took a small pay cut with this new role, I still make \$69000 plus 8% towards pension or benefits. I am hoping I did not make a bad decision in my fervour to get back on the road; any and all advice would be greatly appreciated.

• FrugalTrader March 2, 2015, 10:59 am

@ThinkingAheadNow, I’m not sure how \$23k contributed to your RRSP would be taxed as income? If that is indeed the fact, then the \$23k will face about 35% tax.

• ThinkingAheadNow March 2, 2015, 11:05 am

I have been told that it will count towards this year’s income despite putting it towards last year’s RRSP contributions. So that means I’d be expected to pay 35% on it next year when I file 2015 taxes, i.e. \$8050? How much RRSP would I need to contribute to avoid that and/or get a tax break?

• FrugalTrader March 2, 2015, 11:19 am

Your best bet would be to punch in your financial details into this financial calculator (http://www.taxtips.ca/calculators/canadian-tax/canadian-tax-calculator.htm) to determine the tax impact of the extra income, and the amount you would need to contribute to your RRSP.

In hindsight, the best solution would have been to carry forward your RRSP contributions from last year into this year.

• Ed Rempel March 2, 2015, 10:39 pm

Are you sure you have the details right? What was the \$23,000 – a vacation or sick pay buyout that you contributed in 2015 for a 2014 contribution? Or was it a portion of the pension that could not be transferred to the LIRA?

A simple solution for you would be to carry forward the \$23,000 contribution and deduct it next year. Then you won’t get a refund this year or owe tax next year.

Since you are in Ontario, you are in a 31% marginal tax bracket, which essentially covers from taxable income of \$44-84,000. That means that all of the \$23,000 deduction for 2014 would be in the 31% bracket, but about \$16,000 will be in the 42% bracket for 2015.

Here are a couple option for you:

1. Claim \$9,000 as a deduction for 2014, get a tax refund of \$3,000, and carry forward the \$16,000 to 2015. Then you will owe about \$3,000 next year, unless you can contribute \$9,000 over the next year. You can’t get much of a car for \$3,000.

2. Claim the full \$23,000 and get a refund of \$7-8,000 for your car. Take an RRSP loan of \$23,000 less what you can contribute over the next year. RRSP loans are generally at lower rates than car loans. Pay it over a few years, depending on the payment you can afford.

These ideas may be a cash flow challenge, but you should feel good contributing a lot to your future while buying a modest car. Both are sound financial moves.

Ed

• ThinkingAheadNow March 2, 2015, 10:52 pm

Hi Ed,
Thanks for breaking down various options for me!
Sorry if I didn’t explain this well but I’m not remotely financially savvy. \$23,000 was the portion of the pension that could not be transferred to the LIRA; does that clarification change your earlier suggestions?
Thanks!

• Ed Rempel March 3, 2015, 8:03 pm

That’s quite different. The portion of your pension that could not be transferred to your LIRA was still a tax-free rollover between the pension and your RRSP. There should be no tax consequences, since it is a direct transfer.

The good news – no tax problem. :) The bad news – no tax refund to buy a car. :(

Ignore my last post. You probably did the right thing. If you can earn more than 5%/year on your investments long term, you will probably be better off from moving your pension to your own RRSP & LIRA.

Ed

• Ed Rempel March 3, 2015, 8:06 pm

That’s quite different. The portion of your pension that could not be transferred to your LIRA was still a tax-free rollover between the pension and your RRSP. There should be no tax consequences, since it is a direct transfer. Ignore my last post.

The good news – no tax problem. :) The bad news – no tax refund to buy a car. :(

Did you do the right thing? If you can earn more than 5%/year on your investments long term, you will probably be better off from moving your pension to your own RRSP & LIRA. Pensions provide a guaranteed income, but good investors should have a higher & more flexible income in their RRSPs.

Ed

• ThinkingAheadNow March 3, 2015, 10:03 pm

• ken lee March 24, 2015, 2:57 pm

• Ashley August 13, 2015, 5:23 pm

Hello,
I am going to opt to take a transfer value on my government pension which I am not longer contributing toward. My inlimit will have to be locked in with a LIRA, is this separate from my allowed RRSP contribution? Can I lock my in-limit into a LIRA and my out-limit into a regular RRSP?

Thanks,
Ashley

• Ed Rempel August 15, 2015, 12:10 pm

Hi Ashley,

Yes, transferring your pension to a LIRA does not affect your RRSP contribution room – unless a portion is taxable and you choose to make an RRSP contribtution with it. In fact, it is possible you may get some RRSP contribution room back in a “pension adjustment reversal”, especially if you were not in the pension very long.

Do you have a specific quote on how much will be transfered and whether the full amount can be transfered tax-free? The pension transfer limit relates to whether it can all be transfered tax-free or whether part of it must be taken in cash. It is dependent on the status of the pension plan.

If a portion must be in cash, you either pay tax on it or make a direct RRSP contribution, which would use your RRSP contribution room.

If you don’t have a quote on how much is transferable tax-free, request it before the transfer, so you can determine the best way to transfer it all.

This transer is called “commuting a pension” and can be a complex decision with signficant pros and cons. You are giving up a lifetime guaranteed return of about 5%/year, in exchange for control of the investing, flexibility in taking income, the ability to unlock half, and being able to leave 100% of the remainder to beneficiaries.

Ed

• Susan December 30, 2015, 2:47 am

Just being picky but…

You write “If you want to figure out your tax return based on your RRSP contribution”. The correct statement should be if you want to figure out your tax refund. You do state that further along in the article. And just to be super anal about it, it should be if you want to calculate your tax savings. Not everyone who makes an RRSP contribution ends up with a refund eg. Self-employed. As a former tax preparer I have seen this point bite people more than once.

• FrugalTrader December 30, 2015, 1:22 pm

Excellent point Susan, thanks for the feedback.

• Brian February 27, 2016, 1:49 pm

My daughter has a tax bill from last year that she is paying back monthly. I wanna buy her an RRSP for this year. Does she have to have her tax bill paid before an RRSP can be bought for this year? thanks.

• Susan February 27, 2016, 4:00 pm

The quick answer is no. However you say you want to buy her an RRSP. She has to purchase this not you so I’m assuming you’re giving her money to invest. If the RRSP contribution generates a refund it will be offset against what she owes. An RRSP contribution does not necessarily guarantee a refund. It could just reduce her 2015 tax liability.

Also you don’t “buy” an RRSP. an RRSP is like an envelope that holds various investments. While the investments are in the RRSP envelope there is no tax on earnings.

• jp January 3, 2018, 2:42 pm

hello ,

my wife just came last year in may 2017 to canada as permanent resident and luckily she got a job , can she contribute to rrsp for year 2017 as its her first year in canada ??? ( like 18% of her total income for 2017 )

• FT January 3, 2018, 5:16 pm

Jp has your wife filed her income tax return yet? Personally I would wait for the notice of assessment from CRA before starting an RRSP.

• Estefania Londono February 5, 2018, 4:13 pm

I don’t think so. RRSP contribution room is based on the prior year’s earnings (in this case 2016) therefore she should have zero contribution room for 2017. I would wait until after submitting the 2017 taxes to see her actual contribution room for 2018.

• Tiziana kochenash March 9, 2018, 2:11 pm

Hi I forgot to do my rrsp contribution. This rrsp I have is a home buyers plan. Would I have to pay a penalty for a missed payment. Or can I put more next year to make up for this year. My max is 1333.00