Notes, continued

(4) The total of all contributions to an RRSP are limited to the lesser of the current year’s 

contribution limit and 18% of an individual’s earned income for the preceding year, plus 

any carry-forward contribution room. The amount of earned income that generates the 

contribution limit each year is indicated in the table. 

(5) The deferred profit sharing plan (DPSP) contribution limits are equal to one-half of the RPP 

contribution limits for the year. 

(6) The total of all employer contributions to a DPSP are limited to the lesser of the current 

year’s contribution limit and 18% of an employee’s pensionable earnings for the year. The 

amount of pensionable earnings that generates the contribution limit each year is indicated 

in the table.

(7) Canadians age 18 and over can earn tax-free income in a Tax-Free Savings Account (TFSA) 

throughout their lifetime. Income, losses and gains on investment in the account, as well 

as amounts withdrawn, are not taxable and are not taken into account for determining 

eligibility for certain income-tested benefits or credits. Each calendar year, beginning in 

2009, a taxpayer can contribute up to $5,000 (or the indexed annual contribution amount) 

to a TFSA, plus any unused TFSA contribution room from the previous year. Generally, 

amounts withdrawn from a TFSA will be added to the individual’s contribution room for 

future years. TFSA contributions are not tax-deductible. The $5,000 annual contribution 

room limit is indexed for inflation, and rounded to the nearest $500.

(8) While there is no annual limit, contributions into the plan should be carefully considered in 

order to maximize government assistance payments under the Canada Education Savings 

Grants and Canada Learning Bonds programs.

(9) Retirement education savings plans (RESPs) are commonly used by parents and other 

guardians to save for a child’s post-secondary education. Like RRSPs, income earned in the 

savings plan accumulates tax-free. However, unlike RRSPs, contributions made to an RESP 

are not deductible in calculating the contributor’s net income for tax purposes. In addition, 

there is no annual contribution limit for a beneficiary. However, for each beneficiary there is 

a lifetime limit of $50,000, regardless of the number of plans in place for that beneficiary.

(10)  While there is no annual limit, contributions into the plan should be carefully considered in 

order to maximize government assistance payments under the Canada Disability Savings 

Grant and Canada Savings Bonds programs.

(11)  A registered disability savings plan (RDSP) is a savings plan to help parents and others 

save for the long-term financial security of a person who is eligible for the disability tax 

credit. Like RESPs, contributions to RDSPs are not tax-deductible, but investment income 

can be earned in the plan tax-free. While there is no annual limit, contributions on behalf 

of any one beneficiary are capped at a lifetime maximum of $200,000. Contributions 

can continue to be made until the end of the year the beneficiary turns 59, or until the 

beneficiary ceases to be a resident of Canada, dies or ceases to qualify for the disability tax 

credit.

Retirement and Savings Plans—Contribution Limits  /  45

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Current as of June 30, 2013