RRSP tax savings calculator 2026
An RRSP contribution is deducted from your taxable income, so it saves tax at your marginal rate. Put $5,000 into an RRSP on an $80,000 salary in Ontario and you save $1,483 of tax: the contribution really costs you $3,518.
Tax saved by a $5,000 RRSP contribution
| Salary | Ontario | Quebec | British Columbia | Alberta |
|---|---|---|---|---|
| $40,000 | $1,353 | $1,285 | $1,158 | $1,100 |
| $60,000 | $1,217 | $1,516 | $1,144 | $1,159 |
| $80,000 | $1,483 | $1,806 | $1,410 | $1,525 |
| $100,000 | $1,508 | $1,806 | $1,410 | $1,525 |
| $125,000 | $2,170 | $2,286 | $1,914 | $1,800 |
| $150,000 | $2,170 | $2,373 | $2,035 | $1,800 |
| $200,000 | $2,413 | $2,511 | $2,305 | $2,115 |
The saving is roughly your combined marginal rate times the contribution, so it is biggest at high incomes: $2,170 at $150,000 in Ontario. It can also be surprisingly good at modest incomes: at $40,000 in Ontario it saves $1,353, more than the $1,217 at $60,000, because a lower net income also brings back part of the LIFT credit and trims the health premium. A contribution that straddles a bracket threshold is relieved partly at each rate, which the calculator handles.
How the deduction works
- The contribution comes off net income on line 20800 of your return, so it lowers federal and provincial tax. It does not lower CPP or EI, which are charged on your pay.
- Lower net income can also bring back income-tested credits, such as the Ontario LIFT credit (which ends at $50,000) or the BC tax reduction (which ends at $44,952), and the federal basic personal amount above $181,440.
- Contributions in the first 60 days of the next year can be deducted on this year's return. You can also contribute now and carry the deduction forward to a year when your income is higher.
- Your deduction limit is on your latest CRA notice of assessment and in CRA My Account. Over-contributions beyond a small buffer are taxed monthly.
Refund or smaller paycheques
If you contribute on your own, payroll keeps deducting tax as if you had not, and the saving comes back as a refund in spring. A group RRSP through your employer usually takes the contribution off before tax on each cheque. You can also ask CRA to approve a lower withholding with form T1213 if you make regular contributions.
When an RRSP pays off most
Withdrawals are taxed as income, so the RRSP works best when your marginal rate now is higher than it will be in retirement. In Ontario the combined marginal rate is 19.05% at $40,000 of taxable income but 43.41% at $120,000; someone in the lowest bracket gains little from deducting now and may prefer a TFSA.
FAQ
How much tax will a $5,000 RRSP contribution save me?
It depends on your income and province. On $75,000 in Ontario it saves $1,633; in Alberta $1,525; in Quebec $1,806.
When is the RRSP deadline for the 2026 tax year?
Contributions made in 2026 or in the first 60 days of 2027 can be deducted on your 2026 return.
Does an RRSP contribution reduce CPP and EI?
No. CPP and EI are charged on your employment income before any RRSP deduction, so only income tax goes down.
Should I contribute to an RRSP in the lowest tax bracket?
The saving is smaller: at $40,000 in Ontario each $100 saves about $24.05. You can contribute now and claim the deduction in a later year when your rate is higher.