What You Need to Know About the 2025 RRSP Contribution Deadline

As tax season approaches, one important deadline that Canadians shouldn’t overlook is the RRSP contribution deadline. The deadline to contribute to your Registered Retirement Savings Plan (RRSP) for the 2024 tax year is March 1, 2025. Making contributions before this date can help you reduce your taxable income and maximize your retirement savings.

If you’re unsure how RRSP contributions work or whether you should contribute before the deadline, here’s everything you need to know.

Why the RRSP Contribution Deadline Matters

Your RRSP contributions lower your taxable income, which can reduce the amount of tax you owe or even increase your tax refund. Contributions made by March 1, 2025, can be applied to your 2024 tax return, meaning you’ll see the tax benefits when you file this year.

For example, if your taxable income for 2024 was $65,000 and you contribute $6,000 to your RRSP before the deadline, your taxable income is reduced to $59,000—which could result in a lower tax bill and possible refund.

How Much Can You Contribute?

Your RRSP contribution limit is based on:

• 18% of your earned income from the previous year (up to a maximum set by the CRA)

• Unused contribution room from previous years

• Pension adjustments (if applicable)

For the 2024 tax year, the maximum contribution limit is $31,560. You can check your personal contribution room by logging into your CRA My Account.

What Happens If You Contribute Too Much?

If you exceed your contribution limit by more than $2,000, you may face a 1% penalty per month on the excess amount. If you’ve overcontributed, it’s important to withdraw the extra funds or speak with an accountant about how to minimize penalties.

Should You Contribute Before the Deadline?

Contributing to your RRSP before the deadline can be a great financial move if:

• You expect to owe taxes and want to reduce your bill

• You’re in a high-income bracket and want to maximize tax savings

• You have unused contribution room and want to take advantage of it

However, if you have higher-interest debt (like credit card debt), it may be wise to prioritize paying that off first.

How to Make an RRSP Contribution Before the Deadline

You can contribute to your RRSP through:

• Your bank or financial institution (online, in-person, or via automatic transfers)

• An investment account (such as a self-directed RRSP)

• Employer-sponsored RRSP plans

If you’re unsure about how much to contribute or need help optimizing your RRSP strategy, speaking with an accountant or financial advisor can ensure you’re making the most of your tax savings.

Don’t Miss Out on Tax Savings—Plan Your RRSP Contribution Today!

The March 1, 2025 deadline is fast approaching! If you’re looking for guidance on your RRSP contributions or tax planning, contact us today—we’ll help you make the best financial decision for your future.