How much can you contribute to an RRSP?

It's little wonder why we Canadians love our registered retirement savings plans (RRSPs).  They let us set aside money for retirement. The funds can grow tax-free until you withdraw them. And your contributions can lead to a nice surprise at tax time because they're deductible.

How much can you contribute to your RRSP in 2024? The maximum is $31,560 or 18% of your earned income from 2023.

This limit, however, will vary from person to person based on three factors. 

1. Unused RRSP contribution room

If you haven't contributed the maximum in previous years, you could have unused contribution room to carry forward. This will bump up the amount you can contribute in a given year. 

No need to do the math to figure out what space is available. Each year, the Canada Revenue Agency (CRA) does it for you. Your Notice of Assessment lists your unused RRSP room for the current year. It also outlines what your maximum for the next tax year will be.

2. Contributions to a pension plan

Let’s say you're a member of a pension plan at work. Then you must subtract your Pension Adjustment (PA) from your RRSP contribution limit. Once again, the CRA does this for you on your Notice of Assessment. There's no need to worry about this the first year you join a pension plan. Your PA for a year reduces your RRSP deduction limit for the following year.

3. RRSP over-contributions

You can overcontribute up to $2,000 to an RRSP. If you go over that amount, the government will charge you 1% per month on the excess amount. However, it’s possible you overcontribute simply by mistake. Just make sure you withdraw the extra funds right away and send a letter to the CRA explaining that it was a legitimate error. This way you may be able to obtain a waiver for the excess contribution tax.