Does unused contribution room ever expire?

No. Both TFSA and RRSP room carry forward indefinitely. If you have never contributed, your room today is the accumulated total of every year you were eligible. The only cap on RRSP carryforward in practice is that you can no longer contribute to your own RRSP after the end of the year you turn 71.

Why does CRA My Account show more TFSA room than I think I have?

Almost certainly because your recent contributions are not in the CRA's data yet. Banks report TFSA activity once a year, by the end of February for the prior year, so anything you contributed this year is invisible to the CRA. Go with your own records; the CRA figure is a January 1 snapshot at best.

What happens if I contribute more than my room?

For a TFSA, you pay 1% per month on the excess until it is withdrawn or absorbed by new room. For an RRSP, the first $2,000 of lifetime excess is penalty-free (though not deductible), and beyond that you pay 1% per month. In both cases, withdraw the excess as soon as you notice it and consider asking the CRA to waive the penalty if it was an honest error.

Do TFSA and RRSP share the same contribution room?

No, they are completely separate limits calculated in completely different ways. Maxing out one has no effect on the other. TFSA room is a flat amount everyone receives; RRSP room is earned from your income and reduced by workplace pension accrual.

Contribution Room

Droits de cotisation in French

Quick definition

Contribution room is the maximum amount you are allowed to put into a registered account like a TFSA or RRSP. Each account type calculates it differently, unused room carries forward, and going over triggers a penalty tax of 1% per month.

One name, different rules for each account

Contribution room is the umbrella concept behind every registered account in Canada. The government limits how much tax-sheltered money you can hold, and your room is your personal running total of that limit. The idea is the same everywhere, but the mechanics differ by account, and mixing up the TFSA rules with the RRSP rules is one of the most common ways Canadians end up with penalty tax.

The two rules that are true everywhere: unused room carries forward (you never lose it by waiting), and exceeding your room costs you a penalty of 1% per month on the excess.

TFSA room: same for everyone

TFSA room does not depend on your income at all. Every Canadian resident 18 or older with a valid SIN gets the same annual amount, $7,000 for 2026 (as of July 2026). Your total room is the sum of every annual limit since you became eligible, minus your contributions, plus any withdrawals.

The timing rule on withdrawals is the one to memorize: money you withdraw is added back to your room on January 1 of the following year, not the day you take it out. Re-contributing a withdrawal in the same calendar year only works if you still have unused room to absorb it.

RRSP room: earned with income

RRSP room is personal and income-based. Each year you earn 18% of your previous year's earned income, up to an annual dollar limit of $33,810 for 2026 (as of July 2026). Earned income mostly means employment and self-employment income; investment income does not count.

Unused RRSP room carries forward indefinitely, just like TFSA room. But if you are a member of a workplace pension plan, your new room is reduced by a pension adjustment that reflects the value of what accrued in the pension that year. This is why two colleagues with identical salaries can have very different RRSP room.

One more difference: RRSP withdrawals do not restore your room. Once you take money out (outside of the Home Buyers' Plan and Lifelong Learning Plan), that room is gone for good.

Why the CRA's number can be months out of date

CRA My Account shows a contribution room figure for both accounts, and for the TFSA it comes with a trap: the number can be months stale. Financial institutions only report TFSA transactions to the CRA once a year, by the end of February for the previous calendar year. If you contributed in March, the CRA's figure has no idea, and it will not know until early next year.

Treat the CRA's TFSA number as a January 1 snapshot at best, and only if all your institutions reported correctly and on time. It is a starting point, not a green light. If you rely on it in July after contributing in the spring, you can easily "confirm" room you have already used and over-contribute.

The fix is unglamorous but reliable: keep your own record. A simple list of every TFSA contribution and withdrawal, by date, tells you your real room in thirty seconds and is the number to trust when the CRA's figure disagrees.

Penalties for going over

The TFSA has no grace amount. Any excess is taxed at 1% per month, based on the highest excess in the account that month, until you withdraw it or new January room absorbs it.

The RRSP is slightly more forgiving: you get a $2,000 lifetime buffer before penalties start. Excess contributions beyond that buffer are taxed at 1% per month. The buffer is a safety margin for small mistakes, not free extra room; contributions inside it are not deductible.

Where to find your room

Your RRSP room appears on your Notice of Assessment each year after you file your taxes, and it is reliable because it is built from your reported income. It is also shown in CRA My Account.

Your TFSA room is only available through CRA My Account (or the CRA's automated phone line), with the staleness caveat above. Check it in January or February before contributing for the year, cross-check it against your own records, and let your own records win any dispute.

In Canada

Contribution room is the currency of Canada's registered account system. The federal government indexes the TFSA and RRSP limits to inflation (the TFSA in $500 jumps), so the annual amounts change over time. The carryforward design is deliberately generous by international standards: many countries run "use it or lose it" annual limits, while Canada lets unused room accumulate for decades and lets late starters catch up all at once.

Worked example

In July 2026, Priya logs into CRA My Account and sees $28,000 of TFSA room. It looks like great news, but that figure is a January 1, 2026 snapshot. In March she contributed $10,000, which her bank will not report to the CRA until February 2027. Her real remaining room is $18,000.

Trusting the screen and contributing $28,000 would put her $10,000 over, costing $100 per month in penalty tax until she withdrew the excess. Her own spreadsheet, one line per contribution, is what catches the difference.