January 29, 2017

2016 RRSP Contribution Limit and Deadline

The RRSP contribution limit for 2016 is 18% of your 2015 income or $25,370, whichever is less. If you are a member of a registered pension plan, then you need to deduct your pension adjustment (the amount on line 52 of your T4 slip) from the maximum allowable contribution for the year. If you were not able to make the maximum contribution to your plan in any of the years from 1991 to 2015, you can carry forward those amounts and make up the difference in 2016.

You will need an income of $140,944 in 2015 to be able to contribute the maximum allowable contribution of $25,370 to your RRSP in 2016.

For purposes of RRSP contributions, earned income includes salaries, business income, employee profit sharing income, disability pensions (issued under the Canada & Quebec pension plans), taxable alimony or maintenance, and rental income.  Your earned income is reduced by business losses, rental losses, union dues, employment expenses, and deductible alimony or maintenance paid. Certain types of income such as retiring allowances, investment income, capital gains, pension income and business income earned as a limited partner are not classified as earned income.

The deadline for contributing to your RRSP, in order to be able to deduct the amount from your 2016 income, is March 1, 2017.