To calculate the registered retirement savings plan contribution for a given tax year, complete the following steps:
- Confirm that the current RRSP contribution deadline has not passed. For the 2016 tax year, the deadline is March 1, 2017.
- List out your total earned income for the year.
- Multiply your total earned income by 18% (or 0.18).
- Your total contribution is allowed to be either the value calculated in step 3 or $25,370, whichever one is lower.
For example, if your total earned income in 2016 is $165,000, your 18% would be $29,700. This is higher than the $25,370 RRSP contribution limit, so you can only contribute $25,370.
On the other hand, if your total earned income is $65,000, you could contribute 18% of this, or $11,700.