RRSP contribution room for 2026: the 18% rule, the $33,810 cap and how to read your limit

Your new RRSP room for 2026 is 18% of your 2025 earned income, up to a maximum of $33,810, minus any pension adjustment reported by your employer, plus any room you have not used since 1991. The exact figure is printed on your notice of assessment for the 2025 tax year as your "RRSP deduction limit for 2026", and it is in CRA My Account. Contributions made from January 1, 2026 to March 1, 2027 can be deducted on your 2026 return. You need about $187,833 of earned income in 2025 to reach the $33,810 cap ($33,810 ÷ 18%).

This guide belongs to the 2026 account rules overview. It deals with managing the room itself; the size of the tax refund a deduction produces is a separate calculation. General information only.

The formula, line by line

The cap is indexed to the average wage. It was $32,490 for 2025, is $33,810 for 2026, and the CRA has published $35,390 for 2027.

What counts as earned income

Earned income for RRSP purposes is not the same as total income. It generally includes:

• employment income (salary, wages, taxable benefits), minus union dues and deductible employment expenses;
• net self-employment income, or minus a business loss;
• net rental income from real property, or minus a rental loss;
• taxable spousal or child support received (support payments you deduct reduce it);
• CPP or QPP disability benefits;
• royalties for a work or invention you created.

It generally does not include investment income such as interest, dividends and capital gains, pension income, OAS, RRSP or RRIF withdrawals, or employment insurance benefits. That is why a retiree living on investments builds no new room, and why a business owner paid only in dividends builds none either.

Worked example: an employee with a workplace pension

An illustrative employee earned $82,000 in 2025, paid $900 of union dues and has a defined benefit pension with a pension adjustment of $6,400. Unused room carried forward: $4,200.

Contributions made in January and February 2026 that were already claimed on the 2025 return do not count against this. Contributions made between March 2, 2026 and March 1, 2027 do, unless you designate early-2027 contributions for 2027 instead (you can simply not claim them for 2026; see below).

The 60-day window and choosing when to deduct

RRSP contributions made in the first 60 days of a year can be deducted for the previous tax year. For 2026 that window ends on March 1, 2027. Two practical points:

1. Contributing is not the same as deducting. You can contribute now and claim the deduction in a later year when your income, and therefore your tax rate, is higher. Students and people on parental leave often do this. Unclaimed contributions appear on Schedule 7 and carry forward.
2. Receipts by period. Institutions issue one receipt for contributions from March to December and another for January to the deadline. Keep both; the second one is easy to misplace.

The $2,000 cushion and over-contributions

The CRA allows a lifetime cumulative excess of $2,000 without penalty (only for people who were 18 or older in the previous year). Above that, the excess is taxed at 1% a month until it is withdrawn or absorbed by new room, and you file Form T1-OVP. The cushion is for honest timing errors, not a place to park money: the $2,000 is not deductible until new room absorbs it. Over-contributions most often happen when someone relies on last year's notice of assessment, forgets a group RRSP payroll deduction, or misses a pension adjustment. The pitfalls hub lists the others.

Contributing investments instead of cash

You can contribute shares, ETF units or mutual funds held in a non-registered account directly to an RRSP ("in kind"). The contribution is valued at fair market value on the day, and you are treated as having sold the investment at that value:

• if it has gone up, the capital gain is taxable in your non-registered account;
• if it has gone down, the capital loss is denied and cannot be claimed.

So it usually makes sense to contribute winners in kind (or sell first and contribute cash if you want the gain), and to sell losers first to claim the loss before contributing the cash.

Group RRSPs and employer matches

Payroll contributions to a group RRSP use the same personal room. They are often deducted from pay before tax is withheld, so the refund arrives through each pay cheque instead of in spring. Employer contributions to a group RRSP are a taxable benefit and also use your room. If you also contribute on your own, add the group RRSP amounts from your pay stubs before you decide how much to deposit elsewhere.

Age limits

You can contribute to your own RRSP until December 31 of the year you turn 71. After that you must convert it (see the RRIF guide). If you still have earned income or unused room, you can keep contributing to a spousal RRSP until the end of the year your spouse or common-law partner turns 71.

Quebec notes

The federal RRSP rules and room apply to Quebec residents, and RRSP deductions are claimed on both the federal return and the Quebec TP-1. Quebec's earned-income components follow the federal ones. Revenu Québec does not issue a separate RRSP deduction limit; the federal notice of assessment is the reference.

Frequently asked questions

Why is my room lower than 18% of my salary?

Most often because of a pension adjustment from a workplace pension or DPSP, union dues or employment expenses, or because the room is based on the previous year's income, not the current one.

Is my room on My Account always current?

It reflects your last assessed return. Contributions made since then are not subtracted, so keep your own running total.

Can I contribute after I stop working?

Yes, if you have unused room. New room comes only from earned income in the previous year.

Does the RRSP room I don't use expire?

No. Unused room carries forward indefinitely while you are under the age limit.

Official sources

• Canada Revenue Agency — RRSP deduction limit, earned income, Form T1-OVP and Schedule 7
• CRA: MP, DB, RRSP, DPSP, ALDA, TFSA limits and YMPE — RRSP dollar limits by year
• Revenu Québec — claiming RRSP deductions on the Quebec return
• Justice Laws Website — Income Tax Act section 146 and Part X.1 (over-contributions)