Cpa Kaival PatelDirector, Profuture Tax Academy · Helping Small Business, CPA & Bookkeepers to Grow

RRSP, TFSA, FHSA Contribution Limits – Don’t Overcontribute!

Name: RRSP, TFSA, FHSA Contribution Limits – Don’t Overcontribute!
Uploaded: 2025-06-03T16:00:15+00:00
Duration: 58 s
Channel: Cpa Kaival Patel
Description: In this instructional video, the speaker explains the contribution limits for Canada's registered savings accounts—RRSP, FHSA, and TFSA. For RRSPs, the…

3 Jun 2025 · 1 min

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In this instructional video, the speaker explains the contribution limits for Canada's registered savings accounts—RRSP, FHSA, and TFSA. For RRSPs, the annual contribution room is 18% of the previous year’s earned income, with unused room carried forward indefinitely. FHSA allows a maximum of $8,000 per year, accumulating up to a lifetime ceiling of $40,000. TFSA limits increase each year and are indexed for inflation; the exact amount can be checked via the CRA’s MyCRA portal or the annual Notice of Assessment. The speaker also warns that any excess contribution triggers a 1% penalty on the over‑contributed amount, illustrating the rule with a numeric example. Viewers are guided on how to verify their available contribution room and the financial consequences of over‑contributing.

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Let's say your salary is $100,000. If you put whole $100,000 into RRSP, technically you pay zero tax, right? No, that's why government has limit on each of this rule. For RRSP, it is 18% of last year income. So last year, let's say you earn $100,000, this year you can contribute $18,000. And this limit, if doesn't use, carry forward. So next year, if you have same income, you can contribute $36,000. For FHSC, there is a limit of $8,000 per year, and it accumulate every year. You can contribute maximum $40,000 in FHSC. For TFSA So there is a limit which increases each year. You can check all these limits by logging into your MyCRA account. If you don't have MyCRA account, government also sends you notice of assessment at home. You can check it from there as well. So there is a limit for contribution, but let's say you want to contribute more. Can you contribute? No. If you contribute, there is a 1% penalty on excess contribution. So let's say your RRSP room is ₹8,000, you contribute ₹15,000, you pay ₹7,000 into 1% penalty.