The formula
2026 RRSP room = the lower of (18% of your 2025 earned income) or $33,810 − your 2025 pension adjustment + unused room carried forward.
The example in the calculator
You live in Ontario, earned a $120,000 salary in 2025, belong to a workplace pension plan (pension adjustment of $6,000 in box 52 of your T4) and had $4,000 of unused room from earlier years.
- 18% of $120,000 = $21,600 (under the $33,810 cap).
- Minus the pension adjustment: $21,600 − $6,000 = $15,600.
- Plus carry-forward: $15,600 + $4,000 = $19,600 of room.
- Contributing the full $19,600 with $120,000 of 2026 income saves about $6,956 of tax.
The refund is a high 35.5% on average because at $120,000 your top dollars are taxed at 26% federal plus 11.16% Ontario, plus the Ontario surtax.
18% of earned income — and where the $33,810 cap bites
| 2025 earned income | 18% | 2026 room (no pension, no carry-forward) |
|---|---|---|
| $40,000 | $7,200 | $7,200 |
| $60,000 | $10,800 | $10,800 |
| $90,000 | $16,200 | $16,200 |
| $120,000 | $21,600 | $21,600 |
| $187,833 | $33,810 | $33,810 |
| $220,000 | $39,600 | $33,810 |
You hit the $33,810 maximum at $187,833 of earned income. The 2027 limit will be $35,390.
What counts as “earned income”?
- Yes: salary and wages, net self-employment income, net rental income, taxable spousal or child support received, CPP/QPP disability benefits.
- No: investment income (interest, dividends, capital gains), pension income, RRSP/RRIF withdrawals, EI benefits.
- Minus: rental losses and deductible support paid.
The pension adjustment, explained gently
If you have a workplace pension, your employer reports a “pension adjustment” (PA) on your T4. It represents the value you built up in the plan last year, and it reduces your RRSP room so that people with and without a pension get roughly the same tax-sheltered space.
Where to check your exact number
Your 2026 limit is printed on the 2025 Notice of Assessment as the “RRSP deduction limit for 2026”, and it is in CRA My Account. If you made contributions in the first 60 days of 2026 that you have not yet reported, subtract those.
Do I have to use all my room?
No. Unused room never expires — it carries forward for as long as you like. Many people contribute a little each year and catch up when their income is higher or when they receive a bonus. If you go over your limit by more than the $2,000 buffer, the excess is charged 1% a month until you withdraw it, so it is worth checking the number before a big contribution. The calculator above warns you if you are over.
FAQ
What is the RRSP limit for 2026?
18% of your 2025 earned income up to a maximum of $33,810, minus your 2025 pension adjustment, plus unused room carried forward.
How much room do I have on a $120,000 salary with a $6,000 pension adjustment?
$21,600 − $6,000 = $15,600, plus any carry-forward. With $4,000 carried forward that is $19,600.
How much tax does a $19,600 contribution save in Ontario at $120,000?
About $6,956 for 2026.
Sources: CRA “Tax rates and income brackets for individuals – 2026” (canada.ca/en/revenue-agency/services/tax/individuals/tax-rates-brackets/current-year.html, modified 25 June 2026); CRA MP, DB, RRSP, DPSP, ALDA, TFSA limits; Government of B.C. personal income tax rates (5.6% lowest rate for 2026); Manitoba Budget 2026 (EY tax alert 25 Mar 2026, indexation paused); KPMG and Manulife 2026 tax tables; provincial basic personal amounts from the 2026 TD1 indexation figures. Checked 5 November 2026.