RRSP 2025: Deadline, Contribution Limits & Who Should Contribute

Every year Canadians face the same question around February: should I contribute to my RRSP before the deadline, and how much? The answer depends on your income, your expected retirement income, and your available room. Here is a practical breakdown.

2025 Key Numbers

• 2024 tax year contribution limit: $31,560 (or 18% of 2023 earned income, whichever is less)
• 2025 tax year contribution limit: $32,490 (or 18% of 2024 earned income)
• 2024 RRSP deadline (for the 2024 tax year): March 3, 2025
• 2025 RRSP deadline: March 2, 2026
• Unused room carries forward indefinitely — check your Notice of Assessment or CRA My Account

What Counts as 'Earned Income' for RRSP Purposes?

Your RRSP room for the following year is calculated at 18% of your current year's earned income. Earned income includes employment income (before deductions), net self-employment income, net rental income, royalties, and certain disability payments. It does not include investment income, RRSP withdrawals, pension income, or EI benefits.

When Does an RRSP Contribution Make Sense?

The core logic is simple: contribute when your current marginal tax rate is higher than the rate you'll pay when you withdraw in retirement. If you earn $100,000 today, you're in roughly the 43% bracket in Ontario. If in retirement you expect to have $50,000 in annual income, you'll be in the 29% bracket — meaning every dollar you contributed saved you 43 cents and will cost you 29 cents when withdrawn. That's a meaningful gain.

If you earn below $50,000 today, the RRSP deduction is worth less and a TFSA contribution often makes more sense. There's no universal answer — it depends on your situation.

Spousal RRSP

You can contribute to your spouse's RRSP using your own contribution room. The deduction goes on your return (reducing your taxable income), but the money grows in your spouse's plan. When they withdraw it in retirement, it's taxed in their hands — ideally at a lower rate. One important rule: if your spouse withdraws from a spousal RRSP within three calendar years of a contribution, the withdrawal is attributed back to you and taxed in your hands instead.

First Home Buyers' Plan and Lifelong Learning Plan

• First Home Buyers' Plan (HBP): Withdraw up to $35,000 tax-free from your RRSP to buy your first home. Repayments are required over 15 years or the amounts are included in income.
• Lifelong Learning Plan (LLP): Withdraw up to $10,000 per year ($20,000 total) to fund full-time education. Repayments over 10 years.
• For first-time home buyers, consider the newer First Home Savings Account (FHSA) — $8,000/year, $40,000 lifetime limit, and unlike the HBP, you don't repay the withdrawal.