Annual Registered Retirement Savings Plan Contributions

Now that we are in a new fiscal year, it time to start thinking about maximizing your Annual Registered Retirement Savings Plan (RRSP) contribution for 2016.   For those that are not aware, you can make an RRSP contribution anytime throughout the year, or up to 60 days into the following year.  The deadline to make contributions for 2016 is March 1st, 2017.

However, before you start making a lump sum contribution you must be aware of your “Contribution Room” limit.

So what is a Contribution Room Limit and where do I find it?

In Canada there are limits on how much an individual can contribute each year into their RRSP account, also known as the “Contribution Room”.  The contribution room is determined by your Canadian earned income of the previous year.  You can find your RRSP contribution room limit on your Notice of Assessment from the Canada Revenue Agency (CRA). You would have received your Notice of Assessment around April of last year, after you filed your 2015 tax return.

Please note, there are penalties if you exceed your RRSP “Contribution Room” limit by more than $2,000.

But what happens if you are new to Canada?

For any newcomers to Canada, the same rule applies however your “Contribution Room” is based on your Canadian income. You can only open up an RRSP account after filing your first tax return. Therefore, if 2016 will be your first tax return in Canada, you will need to wait until you have filed your 2016 tax return, and received your Notice of Assessment from CRA informing you of your 2017 “Contribution Room” limit.

You can also view your “Contribution Room” limit online if you register for CRA’s My Account.

For further information on an RRSP account, please go to the CRA website.

Sally Lewicki / Benefits Specialist / PEO Canada

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