An RRSP contribution saves you tax at your combined federal + provincial marginal rate. A $10,000 contribution by an Ontario resident at the 31% combined marginal rate saves about $3,100. This calculator shows your tax savings, effective cost, and (optionally) projected retirement value for any Canadian province.
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Contribution limit: 18% of last year's earned income, up to ~$32,500 for 2026.
Retirement projection (optional)
Tax saved this year
$0
Effective cost
$0
(contribution − tax savings)
Marginal rate
0%
(federal + provincial)
At retirement
—
Set years + return
Contribution vs effective cost
The green portion is what you actually pay; the gold portion is the tax saving.
With RRSP vs without
Scenario
Annual take-home
RRSP balance
Without RRSP contribution
$0
$0
With RRSP contribution
$0
$0
How RRSP tax savings work
A Registered Retirement Savings Plan (RRSP) contribution is
deducted from your taxable income in the year you contribute. The
tax you save equals:
Where combined_marginal_rate = federal marginal
rate + provincial marginal rate, calculated on your last
dollar of income. Because Canadian tax is progressive, the bigger
your income, the higher this combined rate — meaning RRSP
contributions are more valuable for high earners.
Combined marginal rates by province (selected examples)
At a $100,000 income, the combined marginal rate (federal 20.5% +
provincial) varies meaningfully:
Province
Provincial marginal
Combined
Alberta
10%
30.5%
Saskatchewan
10.5%
31%
Ontario (mid bracket)
9.15%
29.65%
BC (mid bracket)
7.7%
28.2%
Quebec (mid bracket)
19%
~32% (after federal abatement)
Manitoba
12.75%
33.25%
A $10,000 RRSP contribution at $100k income therefore saves
anywhere from $2,820 (BC) to $3,325 (Manitoba) in tax — a meaningful
difference, especially compounded over a career.
Contribution room and the 2026 limit
Your annual RRSP room is the lesser of:
18% of your prior year\'s earned income, and
The annual dollar cap (~$32,500 for 2026, indexed to average wage growth).
Unused contribution room carries forward indefinitely.
If you contributed $5,000 less than your limit in 2025, that
$5,000 is added to your 2026 room. Many Canadians have substantial
accumulated room they\'ve never used. Check your most recent CRA
Notice of Assessment for your exact contribution room.
RRSP vs TFSA decision tree
Two tax-advantaged accounts, different mechanics:
RRSP: pre-tax contributions, tax-free growth,
withdrawals taxed as income. Optimal when your current marginal
rate is HIGHER than your expected retirement rate.
TFSA: post-tax contributions, tax-free growth,
tax-free withdrawals. Optimal when current rate is the same or
LOWER than retirement rate, OR when you need flexibility for
non-retirement uses (the TFSA isn\'t locked in).
For most mid-career professionals in 22%+ federal brackets, RRSP
wins. For students, early-career workers under 30 in 15% brackets,
TFSA usually wins. High earners ideally max both.
Your tax savings equal your contribution × your combined marginal tax rate (federal + provincial). For example, a $10,000 RRSP contribution by an Ontario resident in the 22% federal + 9.15% Ontario bracket saves roughly $3,115 in tax. High earners in Quebec hitting the 53% combined top rate save over $5,300 on the same $10,000 contribution.
What's the RRSP contribution limit for 2026?
2026 contribution room is the lesser of (a) 18% of your prior year's earned income, or (b) the annual dollar maximum (approximately $32,500 for 2026, indexed to wage growth). Unused contribution room from prior years carries forward indefinitely — check your CRA Notice of Assessment for your exact limit.
When should I contribute to my RRSP vs my TFSA?
RRSP when your current marginal tax rate is HIGHER than your expected retirement marginal rate — typical for mid-career professionals. TFSA when your current rate is the same or LOWER (e.g., students, early-career workers, retirees in low brackets). For high earners, max both: RRSP for the immediate tax deduction, TFSA for tax-free growth.
What's the deadline to contribute for the previous tax year?
The first 60 days of the calendar year. For the 2026 tax year, contributions made up to March 2, 2027 can be claimed on your 2026 return. This 60-day window lets you compute your 2026 tax bill and decide how much to contribute to optimize the deduction.
Can I withdraw from my RRSP early?
Yes, but you'll pay tax on the withdrawal at your current marginal rate. Two penalty-free programs: the Home Buyers' Plan (up to $60,000, must repay over 15 years) for first-time home buyers, and the Lifelong Learning Plan (up to $20,000) for full-time education. Otherwise, early withdrawals lose the tax-deferred growth benefit.
Should I contribute equal amounts each year or save more later?
Mathematically, contributing earlier wins because of compounding. But practical considerations: (1) if you expect higher income later, deferring some contributions to those years gives you a bigger tax break; (2) RRSP room carries forward — there's no rush. A reasonable rule: contribute enough each year to capture employer matching (free money), then optimize.
What happens at retirement?
RRSP must be converted to a RRIF (Registered Retirement Income Fund) by the end of the year you turn 71. RRIF requires minimum annual withdrawals (starting at ~5.28% at age 71, rising to 20% at age 95). Withdrawals are taxed as income at your retirement marginal rate.
Does the calculator account for employer-matched RRSP contributions?
No — enter only YOUR portion in the contribution field. Employer matches don't use your contribution room and don't generate additional tax savings for you (the match itself is taxable income when contributed, then deductible, netting to zero). Always capture employer matching even if it doesn't save you tax — it's 100% return on the money.