How the RRSP contribution limit is calculated
Your RRSP contribution limit for the current year is 18% of the earned income you reported on last year's tax return, up to an annual dollar maximum set by the CRA — whichever of the two is lower. Earned income includes employment income, self-employment income, and certain other amounts, but excludes investment income and pension income.
This is your new room for the year; it adds to any unused room carried forward from previous years, and is reduced by a pension adjustment if you belong to an employer pension plan. The annual cap rises most years with average wage growth.
The 2026 annual cap ($33,810) is confirmed for the 2026 tax year; the 2025 cap was $32,490.
How do I calculate my RRSP contribution limit?
Multiply last year's earned income by 18%, then compare that to the CRA's annual dollar cap — your limit is whichever number is lower. Example: $100,000 in earned income gives 18% × $100,000 = $18,000, which is below the 2026 cap of $33,810, so your new room is $18,000.
Steps to calculate your RRSP contribution limit
- Find your earned income from last year's tax return (employment and self-employment income, not investment or pension income).
- Multiply that income by 18% (0.18) to get the percentage-based amount.
- Compare it to the CRA's annual dollar limit for the current year ($33,810 for 2026).
- Your new contribution room is whichever of those two numbers is lower.
- Add any unused room carried forward from prior years, and subtract your pension adjustment if you belong to an employer pension plan, to get your total available room.
RRSP contribution limit formula
New room = min(Earned income × 18%, Annual cap)
- Earned income = last year's employment and self-employment income reported to the CRA
- 18% = the fixed percentage rate that applies regardless of income level
- Annual cap = the CRA's dollar maximum for the year ($33,810 for 2026, $32,490 for 2025)
Example RRSP room by prior-year income (2026 cap)
| Prior-year earned income | 18% | New RRSP room |
|---|
| $50,000 | $9,000 | $9,000 |
| $100,000 | $18,000 | $18,000 |
| $150,000 | $27,000 | $27,000 |
| $200,000 | $36,000 | $33,810 (capped) |
| $300,000 | $54,000 | $33,810 (capped) |
Frequently asked questions
At what income does the annual cap start to apply?
For 2026, 18% of income reaches the $33,810 cap at an earned income of about $187,833. Above that income, your new room stays fixed at the annual cap rather than continuing to grow with income.
Does unused RRSP room expire?
No. Unused RRSP contribution room carries forward indefinitely, similar to TFSA room, so you can contribute more in a later year to catch up.
What counts as earned income for this calculation?
Employment income, net self-employment income, and certain other amounts like rental income (in some cases) count as earned income. Investment income, capital gains, and pension income generally do not.
Why might my actual limit differ from this estimate?
If you belong to an employer pension plan or deferred profit sharing plan, a pension adjustment reduces your room. Your CRA Notice of Assessment shows your exact, official RRSP deduction limit.
This calculator estimates the percentage-and-cap portion of your RRSP limit only; it does not account for pension adjustments, unused room carried forward from prior years, or other adjustments the CRA applies. Check your Notice of Assessment or CRA My Account for your exact deduction limit before contributing.