RRSP Contribution & Tax Savings Calculator
Calculate your 2026 RRSP contribution room (18% of earned income, up to $33,810), the tax refund it generates, and how salary vs dividends affects it.
2026 RRSP contribution room is 18% of the PRIOR year's earned income, up to a dollar ceiling of $33,810 (up from $32,490 in 2025), whichever is LOWER, less any pension adjustment for employer-plan members, plus any carried-forward unused room from prior years (not modelled here). reliefRate=1.0 because an RRSP contribution is an ordinary deduction from net income before the tax-bracket calculation (not a separate tax credit), so its cash value to the contributor equals their own marginal tax rate on the contributed amount — meaningfully different for a salary-earning contractor (whose 'earned income' includes T4 salary) versus one paid entirely in dividends, since CRA dividend income does NOT count as 'earned income' for RRSP purposes at all, so an owner-manager who takes only dividends builds ZERO RRSP room — a major, real trade-off this tool should surface for id17's salary-vs-dividend optimiser. An Individual Pension Plan (IPP) can allow materially higher tax-deductible contributions than the RRSP cap for incorporated contractors roughly 40+ with stable T4 salary history, but is a distinct vehicle not modelled by this scheme.
How much RRSP room you have, and why salary vs dividends changes it
RRSP contribution room in 2026 is 18% of your prior year's earned income, up to a dollar ceiling of $33,810, up from $32,490 in 2025, whichever is lower, less any pension adjustment, plus whatever unused room you've carried forward from previous years.
The catch that trips up a lot of incorporated contractors: dividends are not earned income for RRSP purposes at all. If you pay yourself entirely in dividends, you build zero new RRSP room every year, no matter how much the corporation earns — only salary and a handful of other earned-income sources count. This calculator works out your 2026 room and the tax refund a contribution generates, and flags that trade-off if you're weighing salary against dividends.
What determines your RRSP room
- 18% of your prior year's earned income, capped at $33,810 for 2026
- Reduced by any pension adjustment if you're also a member of an employer or corporate pension plan
- Increased by any unused contribution room carried forward from previous years
- Built only by salary and other earned income — never by dividends, which is a key trade-off for incorporated owner-managers choosing how to pay themselves
