How to Open a TFSA in Canada
Open a Tax-Free Savings Account in Canada: who is eligible, how contribution room works, what you need to open the account, and how to avoid the 1% per month over-contribution tax.
TFSA and RRSP Limits for 2027 in Canada
The RRSP dollar limit for 2027 is published at $35,390. The TFSA dollar limit for 2027 had not been announced as of October 30, 2026. This guide states both statuses, the verified 2026 limits, and how each limit works.
Applies in: CA
The two best-known savings limits in Canada do not arrive on the same schedule. The RRSP dollar limit for 2027 is already published, because it is set a year ahead from the money purchase limit. The TFSA dollar limit for 2027 had not been announced as of October 30, 2026. This guide states both statuses exactly as they stand, gives the verified 2026 figures for comparison, and explains how each limit works. It gives no advice about which account to use or how much to contribute: it states mechanics only, and the personal figures that govern any individual are the ones on their notice of assessment and in their own records.
The RRSP limit for 2027: published at $35,390
The Canada Revenue Agency limits table publishes the RRSP dollar limit for 2027 as $35,390. The Agency announced that figure on October 30, 2025, together with the 2026 limits: the 2027 RRSP limit equals the 2026 money purchase limit of $35,390, and the 2028 RRSP limit is already listed as $36,390 on the same table. The 2026 RRSP dollar limit was $33,810, so the ceiling rises by $1,580 for 2027.
The dollar limit is a ceiling, not a personal allowance. New RRSP deduction room for a year is generally the lesser of two amounts: 18 percent of the previous year's earned income, and the annual dollar limit. To reach the full $35,390 ceiling from the income side, a person needs earned income of about $196,611 in 2026, since $35,390 divided by 0.18 is $196,611.11. Below that income level, the 18 percent figure is the binding one, and the dollar limit does not add room.
The full calculation, as the Canada Revenue Agency states it, starts with unused RRSP deduction room at the end of the preceding year, adds the lesser of 18 percent of the previous year's earned income and the annual limit, subtracts the pension adjustment and any prescribed amount for connected persons, adds any pension adjustment reversal, and subtracts any net past service pension adjustment. The pension adjustment is the value of benefits earned under a registered pension plan or deferred profit sharing plan in the previous year, reported on the T4 slip. It exists so that a person with a workplace pension and a person without one have a similar overall limit for tax-assisted retirement saving, set at 18 percent of earned income up to the dollar ceiling across all registered plans combined.
The resulting personal RRSP deduction limit is the maximum that can be deducted for contributions to RRSPs, pooled registered pension plans, specified pension plans, and a spouse's or common-law partner's RRSP or specified pension plan for the year. It appears on the notice of assessment. The $35,390 ceiling governs only the formula; the notice of assessment figure governs the deduction.
Contributions that count for a tax year include contributions made during the year and in the first 60 days of the following year. The Agency's page gives the 2025 example: contributions from March 4, 2025 to March 2, 2026 qualified for the 2025 return. The exact closing date for the 2027 year follows the same pattern in early 2028 and should be checked on the Agency page when it is posted, rather than assumed from the 2025 dates.
The TFSA limit for 2027: not yet announced
The TFSA dollar limit for 2027 had not been announced as of October 30, 2026. The Canada Revenue Agency limits table, which does publish the 2027 RRSP, money purchase, and pensionable-earnings figures, carries TFSA dollar limits only through 2026. The Agency's contribution-room page states the 2026 TFSA dollar limit of $7,000 and no 2027 figure. The Agency's "What's new" page for savings and pension plan administration likewise announced the 2026 TFSA dollar limit of $7,000 on December 1, 2025, and no 2027 announcement had appeared by October 30, 2026.
The 2027 figure arrives by indexation. The TFSA dollar limit is indexed to inflation and rounded to the nearest $500, as the Agency's contribution-room page states. The limit was $7,000 for each of 2024, 2025, and 2026, $6,500 for 2023, $6,000 for 2019 to 2022, and $5,500 for 2016 to 2018, with $10,000 for 2015 as a one-year exception. Because the limit moves only in $500 steps, it can stay flat for several years and then rise by $500 in one step. Whether the 2027 step occurs depends on the indexed amount crossing the rounding line, and the Agency's announcement is the only authoritative answer.
The recheck date is late November 2026. Check the Canada Revenue Agency limits table and the contribution-room page again then. Until a 2027 figure appears on an Agency page, do not treat any other source's number as the 2027 limit, and do not contribute on the assumption that new room beyond the 2026 limit exists. New room for 2027, when announced, is added on January 1, 2027, together with room restored from 2026 withdrawals.
How TFSA room accumulates
TFSA contribution room is personal and cumulative. It starts to accumulate when a person turns 18 and is resident in Canada. Each year's dollar limit is added to room on January 1 of that year. Unused room carries forward without expiry. Room is a single total across all of a person's TFSAs: holding two accounts does not double the room.
Contributions reduce available room immediately, by the amount contributed. Withdrawals restore room only on January 1 of the following year. A withdrawal made in 2026 therefore becomes available room again on January 1, 2027, together with the 2027 dollar limit, whatever it is announced to be. Qualifying transfers, exempt contributions, and specified distributions are not counted as contributions for room purposes, as the Agency's worksheet states.
For a person who was 18 or older in 2009, was resident in Canada throughout, and never contributed, total room through 2026 is $109,000. That total is the sum of the annual dollar limits on the Agency's table: $5,000 a year for 2009 to 2012, $5,500 for 2013 and 2014, $10,000 for 2015, $5,500 for 2016 to 2018, $6,000 for 2019 to 2022, $6,500 for 2023, and $7,000 for 2024 to 2026. Most people have a different figure, because room depends on the year they turned 18, years of non-residence, contributions, and withdrawals. The reliable way to know the figure is to complete the Agency's worksheet from personal financial records. The TFSA information in a Canada Revenue Agency account is updated only once a year in the spring with the previous year's transactions, so the Agency advises using personal records rather than the account figure alone before contributing.
An excess TFSA amount is taxed at 1 percent per month for as long as the excess remains, based on the highest excess amount in each month, from the first dollar of excess. There is no buffer amount for TFSA excesses. That is why the room calculation belongs before the contribution.
The two limits side by side
The RRSP and TFSA limits are often mentioned together, but they work differently. The RRSP dollar limit caps new deduction room in a formula driven by the previous year's earned income and reduced by pension adjustments, and the personal limit on the notice of assessment is the operative figure. The TFSA dollar limit is the same for every holder each year, is added to personal room on January 1, and carries forward unused without a time limit. RRSP contributions are deductible within the limit and withdrawals are generally included in income; TFSA contributions are not deductible and qualifying withdrawals are not included in income. The tax treatment of withdrawals, and the effect of each account on benefits and credits, depends on the account and the withdrawal, and this guide states no comparison beyond those mechanics.
Related guides
- CPP and EI Figures for 2027 in Canada — the announced 2027 CPP ceilings and EI rate, which determine the CPP and EI amounts that interact with the return.
- Tax Brackets and Basic Personal Amounts for 2027 in Canada — the federal brackets and basic personal amount, with the 2027 figures still pending as of October 30, 2026.
- How to Start Filing Your First Canadian Tax Return as a Newcomer — the first-year return, including the rule that a first-year filer generally cannot deduct RRSP contributions.
- How to Set Up Payroll in Canada — payroll deductions and T4 reporting, including the pension adjustment that reduces RRSP room.
- How to Start Building Credit in Canada — the separate sequence that starts after arrival, including why a foreign credit file does not transfer.
- How to Apply for the Canada Child Benefit — the monthly benefit that depends on filing a return each year.
Dollar limits, by year
| RRSP dollar limit, 2027 (published) | $35,390 |
|---|---|
| RRSP dollar limit, 2026 | $33,810 |
| TFSA dollar limit, 2026 | $7,000 |
| TFSA dollar limit, 2027 | Not yet announced |
| TFSA room since 2009, 2026 (calculated) | $109,000 |
The RRSP limit is a ceiling in a formula, not a personal limit. The TFSA 2027 figure is pending; the 2026 figure is the latest published.
Questions people ask
What is the RRSP dollar limit for 2027?
The RRSP dollar limit for 2027 is $35,390, as published on the Canada Revenue Agency limits table. It is the ceiling in the formula for new RRSP deduction room: new room is the lesser of 18 percent of the previous year's earned income and the dollar limit, plus unused room carried forward, with pension adjustments and related items applied. A person needs about $196,611 of earned income in 2026 to reach the full $35,390 ceiling from the 18 percent side of the formula, since $35,390 divided by 0.18 is $196,611.11. The $35,390 figure is not a personal contribution limit: a person's own RRSP deduction limit, shown on the notice of assessment, is usually lower, and it is the figure that governs how much can be deducted. The 2026 dollar limit was $33,810.
What is the TFSA dollar limit for 2027?
It had not been announced as of October 30, 2026. The Canada Revenue Agency limits table carries no 2027 row for the TFSA dollar limit, and the Agency's contribution-room page states only the 2026 limit of $7,000. The 2027 limit is set by indexation and rounded to the nearest $500, and the Agency normally announces it later in the fall, so the recheck date is late November 2026. Until the Agency publishes it, the 2026 limit of $7,000 is the latest verified TFSA dollar limit, and it must not be presented as the 2027 limit. New TFSA room for 2027, whatever the dollar limit turns out to be, is added to contribution room on January 1, 2027, together with any room restored from withdrawals made in 2026.
How is my own RRSP deduction limit different from the dollar limit?
The dollar limit is one input. The Canada Revenue Agency generally calculates a person's RRSP deduction limit as unused RRSP deduction room at the end of the preceding year, plus the lesser of 18 percent of the previous year's earned income and the annual RRSP limit, minus the pension adjustment and related prescribed amounts, plus any pension adjustment reversal, minus any net past service pension adjustment. A pension adjustment, reported by an employer on a T4 slip, reflects benefits earned under a registered pension plan or deferred profit sharing plan in the previous year, and it reduces new RRSP room so that total tax-assisted retirement saving stays within the overall 18 percent limit. The result appears on the notice of assessment and in the Canada Revenue Agency account, and that personal figure, not the $35,390 ceiling, is the amount that can be deducted for the year.
How does TFSA contribution room work, and what happens when I withdraw?
Contribution room is personal. It starts to accumulate at age 18 for a resident of Canada, and each year's dollar limit is added to it on January 1. Unused room carries forward without a time limit, and room applies across all of a person's TFSAs combined, not per account. A contribution reduces available room at once, by the amount contributed. A withdrawal does not restore room at once: the amount withdrawn is added back as new available room on January 1 of the following year, together with that year's dollar limit. For a person who was 18 or older in 2009, was resident in Canada throughout, and never contributed, total room through 2026 is $109,000, which is the sum of the annual dollar limits from 2009 to 2026 on the Agency's table. A person's own room depends on their own contribution and withdrawal history, so the reliable check is the worksheet completed from personal records, not a remembered total.
What happens if I contribute more than my room to a TFSA or an RRSP?
For a TFSA, an excess amount is taxed at 1 percent per month for as long as the excess remains in the account, based on the highest excess amount in each month, and the tax applies from the first dollar of excess. There is no $2,000 buffer for a TFSA. The Canada Revenue Agency account information on TFSA transactions is updated only once a year in the spring with the previous year's transactions, so the Agency warns filers to calculate room from their own financial records before contributing, rather than relying on the account figure alone. For an RRSP, excess contributions above the deduction limit are also subject to tax, with a $2,000 lifetime buffer that applies to RRSP excess amounts. The two regimes are different, and the TFSA rule is the stricter one on small excesses, which is why the room calculation comes before the contribution, not after it.
When is the deadline for RRSP contributions that count for a tax year?
Contributions made during the tax year and in the first 60 days of the following year can be deducted for that tax year, within the deduction limit for the year. The Canada Revenue Agency page on RRSP deduction limits gives the pattern for the 2025 return: contributions from March 4, 2025 to March 2, 2026 qualified. The same first-60-days pattern applies for the 2027 return, with contributions in early 2028 counting toward 2027, but the exact closing date for the 2027 year had not been published when this guide was written, so check the Agency page for the 2027 deadline before relying on a date. A contribution can also be made and not deducted in the year it is made, and carried forward to a later year, but that choice is recorded on the return and the unused contribution remains subject to the excess rules if it exceeds the limit plus the buffer.
Sources
- Canada Revenue Agency, "MP, DB, RRSP, DPSP, ALDA, TFSA limits, YMPE and the YAMPE" — the 2027 RRSP dollar limit of $35,390 and money purchase limit of $36,390, the 2026 RRSP limit of $33,810, and the TFSA dollar limit history ending at $7,000 for 2026 with no 2027 row —
- Canada Revenue Agency, "What's new — Savings and pension plan administration" (October 30, 2025): the announcement of the 2027 RRSP limit of $35,390 and the 2026 TFSA dollar limit of $7,000 —
- Canada Revenue Agency, "How contributions affect your RRSP deduction limit" — the deduction-limit formula, the 18 percent rule, pension adjustments, and the first-60-days contribution window illustrated for the 2025 return —
- Canada Revenue Agency, "Calculate your TFSA contribution room" — the 2026 TFSA dollar limit of $7,000, the January 1 addition of the dollar limit, and the warning that account information updates only once a year in the spring —
- Canada Revenue Agency, "Before you contribute to a TFSA" — how room accumulates from age 18, the $7,000 limit for 2024 to 2026, indexation rounded to the nearest $500, and the 1 percent per month tax on excess amounts —
- Canada Revenue Agency, "How to contribute to a TFSA" — withdrawals restoring room on January 1 of the following year, and the 1 percent per month excess tax —
No TFSA dollar limit for 2027 is stated in this guide, because the Canada Revenue Agency had not announced one as of October 30, 2026. No exact closing date for 2027 RRSP contributions is stated, because the Agency had published the window only for the 2025 return when checked. Re-check the Canada Revenue Agency limits table and contribution-room page in late November 2026 for the TFSA announcement, and check the notice of assessment for the personal RRSP deduction limit: the Agency's pages and the notice govern over any summary, including this guide.