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as amounts withdrawn, are not taxable and are not taken into account for determining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amounts withdrawn from a TFSA will be added to the individual’s contribution room for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
© 2013 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms
affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
Current as of June 30, 2013