Savings and Pension Plans

1. RRSP Contribution Limits (2025)

The RRSP contribution limit is based on a percentage of your previous year’s earned income, up to a maximum dollar amount. For 2025, the RRSP limit has been set as follows:

• 18% of earned income, up to a maximum of $31,000 (for 2025).
• Carry-forward: If you don’t contribute the full limit in any given year, you can carry forward unused contribution room to future years.

The contribution limit for RRSPs increases slightly every year, adjusted for inflation. So, if you didn’t fully use your RRSP room in the past, you’ll have accumulated more room to contribute in future years.

2. TFSA Contribution Limits (2025)

The TFSA contribution limit is $6,500 for 2025. This is an increase from the previous year’s limits:

• 2024: $6,500
• 2023: $6,500
• 2022: $6,000
• 2021: $6,000
• 2020: $6,000
• 2019: $6,000

Cumulative TFSA Limits (for 2025):

• If you’ve been eligible to contribute since 2009 (when TFSAs were first introduced), and you haven’t contributed the full amount in past years, the total cumulative contribution room would be $92,000 by the end of 2025.

3. Canada Pension Plan (CPP) Contribution Limits (2025)

For 2025, the maximum CPP contribution rates will be:

• Employee Contribution: 5.95% of earnings up to the Year’s Maximum Pensionable Earnings (YMPE).
• Self-Employed Contribution: 11.90% (since self-employed individuals pay both the employee and employer portions).

The YMPE for 2025 is expected to be $67,400 (this can vary slightly based on inflation).

4. Employment Insurance (EI) Contribution Limits (2025)

• Employee EI Contribution: 1.63% of income up to the maximum annual earnings (which is $61,500 for 2025).
• Self-Employed EI Contribution: Self-employed individuals pay both portions, which is 3.26%.

5. Annual Pension Plan Contribution Limits

• For Registered Pension Plans (RPPs), the contribution limits for 2025 will be based on your pensionable earnings and plan type. These limits are often adjusted annually but can be complex based on the specifics of the pension plan.

Other Considerations:

• Contribution Room Carry-Forward: For RRSPs, if you don’t use all your contribution room in a given year, it carries forward indefinitely, so you can use it in a future year.
• Excess Contributions: Be careful not to exceed your contribution limits. The CRA imposes a 1% per month penalty on excess contributions to RRSPs or TFSAs above a certain threshold.

Changes in 2025:

• RRSP Limit Increase: The RRSP contribution limit has increased slightly to $31,000 for 2025.
• TFSA Limit: The TFSA limit is steady at $6,500 for 2025.
• Pension and EI Contributions: Adjustments to EI and CPP contribution limits are based on changes in the YMPE, so for 2025, these are slightly higher than previous years.

Further Resources

Additional information on the variety of Savings and Pension plans can be found on the CRA website using the following links:

Registered Retirement Savings Plan (RRSP)

The Tax-Free Savings Account (TFSA)

Registered Education Savings Plan (RESP)

First Home Savings Account (FHSA)

Registered Disability Savings Registered Disability Savings Plan (RDSP)

Pooled Registered Pension Plan (PRPP)

Contact Us

The team at Monika Gupta CPA Professional Corp is here to provide expert guidance and support on navigating the complexities of Savings and Pension Planning. Should you require further assistance or information, feel free to reach out to us at info@cpamg.ca or call us at +1 416-748-1329.