# RRSP Explained: Limits, Deadline and Tax Refund (2026) > How an RRSP works in Canada for 2026: the $33,810 limit, how your room is set, the contribution deadline and how big your tax refund will be. Source: https://trykosh.com/learn/rrsp-explained Guide - RRSP, TFSA and FHSA # RRSP explained: how it works, how much you can put in and what you get back A Registered Retirement Savings Plan lets you deduct what you put in from your taxable income and pay tax only when you take money out. For 2026 the limit is 18% of last year's earned income, up to $33,810. Here's how the room, the deadline and the refund actually work. Updated October 31, 20266 min readBy the Kosh team On this page[What is an RRSP?](#what-is-an-rrsp)[How much can I contribute to my RRSP in 2026?](#limit)[What happens if I go over?](#over-contribution)[When is the RRSP deadline?](#deadline)[How big will my RRSP tax refund be?](#refund)[What can I hold in an RRSP?](#investments)[Spousal RRSPs](#spousal)[Taking money out, and the age 71 deadline](#withdrawals)[Should I open an RRSP?](#should-i)[FAQs](#faq) ## What is an RRSP? An RRSP is an account registered with the CRA, held at a bank, brokerage or robo-advisor. It isn't an investment by itself: inside it you can hold savings, GICs, funds, ETFs or stocks. What makes it special is the tax treatment: - **Contributions are deductible.** Every dollar you put in comes off your taxable income, so you get back tax at your marginal rate. - **Growth is sheltered.** Interest, dividends and gains inside the plan aren't taxed year by year. - **Withdrawals are taxed as income.** When you take money out, usually in retirement, it's added to your income for that year. So an RRSP defers tax rather than removing it. It pays off most when your tax rate is higher now than when you withdraw, which is why it's usually compared with a TFSA. See [RRSP vs TFSA](/learn/rrsp-vs-tfsa) for that decision. ## How much can I contribute to my RRSP in 2026? Your new room for 2026 is **18% of your 2025 earned income, up to $33,810**, minus any pension adjustment if you're in a workplace pension. You need earned income of about $187,834 in 2025 to get the full amount. For 2027 the dollar limit rises to $35,390. Unused room carries forward forever, so most people's real limit is new room plus everything they haven't used since they started working. Earned income mainly means employment and self-employment earnings, less certain expenses and business or rental losses. Don't calculate this yourself if you can avoid it. Your exact **RRSP deduction limit** is printed on your latest notice of assessment and in your CRA My Account. Contributions to a spouse's RRSP count against your limit, not theirs. ## What happens if I go over? The CRA allows a lifetime cushion of $2,000 above your deduction limit. Beyond that, the excess is taxed at 1% a month until you withdraw it or new room absorbs it, and you have to file a T1-OVP return. If the excess came from a reasonable error and you fix it quickly, you can ask the CRA in writing to waive the tax. ## When is the RRSP deadline? Contributions made in the calendar year, plus those made in the first 60 days of the next year, can be deducted on that year's return. For the 2025 tax year the deadline was March 2, 2026. For 2026 it's **March 1, 2027**. You don't have to deduct a contribution in the year you make it. If you expect a much bigger income next year (a promotion, a bonus, RSUs vesting), you can contribute now and carry the deduction forward to the year it's worth more. ## How big will my RRSP tax refund be? Your refund is roughly your contribution times your marginal tax rate, but not exactly: a large contribution can pull part of your income into a lower bracket, so the average saving falls. These figures are federal plus provincial income tax for a salaried employee in 2026, worked out with the same rules our calculators use: Tax saved by an RRSP contribution, 2026 Income and province Contribution Tax saved As a share $60,000 salary, Ontario $5,000 $1,217 24.3% $100,000 salary, Ontario $10,000 $2,991 29.9% $80,000 salary, Alberta $5,000 $1,525 30.5% $150,000 salary, British Columbia $10,000 $4,032 40.3% For example, an Ontario employee on $100,000 has a marginal rate of about 31.5%. A $5,000 contribution saves about $1,508. **Spend the refund wisely** The "refund" isn't free money. It's tax you paid through payroll that the deduction now says you didn't owe. If you spend it, you've borrowed from your future self at your retirement tax rate. Putting the refund into your TFSA or back into the RRSP is what makes the maths work. If you contribute regularly, you can ask the CRA to let your employer withhold less tax each payday (form T1213) instead of waiting for a refund in spring. ## What can I hold in an RRSP? Cash, GICs, government and corporate bonds, mutual funds, ETFs and listed shares are all qualified investments. What you hold matters more than the account: an RRSP full of cash earning little interest saves tax on very little growth. Fees matter too, because they compound against you for decades. ## Spousal RRSPs If you earn much more than your spouse or common-law partner, you can contribute to an RRSP in their name. You get the deduction; they own the money and pay the tax when it comes out, ideally at a lower rate in retirement. There's an anti-abuse rule: if your spouse withdraws within roughly three calendar years of your last contribution (the year of the contribution and the two before the withdrawal year), the withdrawal can be taxed back to you. ## Taking money out, and the age 71 deadline - **Any time:** you can withdraw, but the amount is taxed as income that year and your bank withholds tax at source. The room you used is gone for good, unlike a TFSA. - **Home Buyers' Plan:** first-time buyers can borrow from their RRSP tax-free and repay over 15 years. See [the Home Buyers' Plan](/learn/home-buyers-plan). - **Lifelong Learning Plan:** you can borrow for full-time education for you or your spouse and repay over time. - **At 71:** the year you turn 71 is the last year you can contribute. By the end of that year the RRSP has to be converted to a RRIF (Registered Retirement Income Fund) or an annuity, or cashed out. A RRIF then pays out a minimum each year, taxed as income. ## Should I open an RRSP? An RRSP is usually worth it when your marginal rate is high now and likely to be lower in retirement, when your employer matches contributions through a group plan, or when you're about to buy a first home. If you're in the lowest bracket, the [TFSA](/learn/tfsa-explained) or an [FHSA](/learn/fhsa-explained) usually comes first. If you're buying a first home, an FHSA gives you the same deduction and a tax-free withdrawal. [Free tool**RRSP tax refund calculator**Find out how much tax an RRSP contribution saves you this year, and what it really costs once the refund comes back.](/tools/rrsp-calculator)[Free tool**Income tax calculator**Work out your 2026 federal and provincial income tax, CPP and EI, and what you keep, in any province or territory. Add self-employment income, capital gains and RRSP contributions to see how each one changes the bill.](/tools/income-tax-calculator)[Free tool**Marginal tax rate calculator**See how much of your next dollar goes to tax in your province, on salary and interest, capital gains and dividends. It's the number that decides what an RRSP contribution saves and what a raise is worth.](/tools/marginal-tax-rate-calculator) **Where Kosh fits** Kosh reads your statements and payslips, estimates your federal and provincial tax, and tells you how much RRSP room is worth using this year and how much belongs in your TFSA or FHSA instead. It reminds you before the deadline and never asks for bank logins. ## Frequently asked questions What is the RRSP limit for 2026? 18% of your 2025 earned income, up to $33,810, minus any pension adjustment, plus unused room carried forward from earlier years. Your exact figure is on your latest notice of assessment and in CRA My Account. When is the RRSP deadline for the 2026 tax year? March 1, 2027. Contributions made in 2026 or in the first 60 days of 2027 can be deducted on your 2026 return. How much tax refund will I get from an RRSP contribution? Roughly the contribution times your marginal tax rate. For an Ontario employee on $100,000, a $5,000 contribution saves about $1,508 in 2026. Large contributions save a little less per dollar because they can pull income into a lower bracket. What happens if I over-contribute to my RRSP? You have a $2,000 lifetime cushion. Any excess above your deduction limit plus $2,000 is taxed at 1% a month until it's withdrawn or absorbed by new room, and you must file form T1-OVP. Can I withdraw from my RRSP before retirement? Yes, but the withdrawal is taxed as income, tax is withheld at source and the contribution room is lost. The Home Buyers' Plan and Lifelong Learning Plan are the exceptions that let you borrow from your RRSP tax-free and repay it. ## Sources - [CRA: RRSPs and Other Registered Plans for Retirement (T4040)](https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/t4040/rrsps-other-registered-plans-retirement.html) - [CRA: RRSP excess contributions](https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/rrsps-related-plans/contributing-a-rrsp-prpp/what-happens-you-over-your-rrsp-prpp-deduction-limit.html) - [CRA: MP, DB, RRSP, DPSP, ALDA, TFSA limits, YMPE and the YAMPE](https://www.canada.ca/en/revenue-agency/services/tax/registered-plans-administrators/pspa/mp-rrsp-dpsp-tfsa-limits-ympe.html) Written by the Kosh team and checked against the rules in force on October 31, 2026. This guide is general information, not tax, legal or investment advice. Kosh is an educational financial planning tool by Primedepth Labs. It is not registered with any Canadian securities regulator as an adviser or dealer, does not recommend specific securities, and does not hold your money or execute trades. Tax figures are estimates; confirm with the CRA or a qualified professional before acting. Investing carries risk. ## Upload your statement and Kosh does this for you. Kosh reads your bank, card and investment statements, estimates your federal and provincial tax and turns guides like this one into your own numbers and next steps. [Start free](/signup?via=learn-rrsp-explained)