How to Calculate RRSP

By QuickBooks Canada Team

0 min read

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.

References & Resources

Information may be abridged and therefore incomplete. This document/information does not constitute, and should not be considered a substitute for, legal or financial advice. Each financial situation is different, the advice provided is intended to be general. Please contact your financial or legal advisors for information specific to your situation.

Related Articles

Preparing Clients for Tax Season

Helping your clients prepare in advance for tax season makes things a…

Read more

How to Calculate Your Hourly Rate When You're an Independent Contractor

When you’re starting out as a freelancer, one of the biggest challenges…

Read more

Tips for Accountants to Consider When Managing Their Accounting Practice Finances

If you’re an accountant with your own practice, you also have to…

Read more