Key takeaways
- TFSA, RRSP and FHSA over-contributions are all taxed at 1% a month
- The RRSP has a $2,000 lifetime buffer (if you were 18 or older); the TFSA and FHSA have none
- The tax applies for each month the excess stays, on the highest excess in that month
- TFSA withdrawals only create new room on January 1 of the next year
- Your TFSA room starts the year you become a resident, if you are 18 or older
Over-contribution rules for each account
| Account | Tax on excess | Buffer | Form |
|---|---|---|---|
| TFSA | 1% a month on the highest excess in each month | None | RC243, due June 30 of the next year |
| RRSP | 1% a month on the excess above the buffer | $2,000 if 18+ | T1-OVP, due 90 days after year end |
| FHSA | 1% a month on the highest excess in each month | None | Reported to CRA for the year |
You can ask CRA to waive or cancel the tax if the excess came from a reasonable error and you remove it quickly (for the RRSP, with Form RC2503).
TFSA room by year (2009 to 2026)
Your TFSA room is the sum of the annual limits for each year since you were both 18 or older and a resident of Canada, minus contributions, plus withdrawals from earlier years. Find your first eligible year below.
| Year | Annual limit | Total room by 2026 if this was your first eligible year |
|---|---|---|
| 2009 | $5,000 | $109,000 |
| 2010 | $5,000 | $104,000 |
| 2011 | $5,000 | $99,000 |
| 2012 | $5,000 | $94,000 |
| 2013 | $5,500 | $89,000 |
| 2014 | $5,500 | $83,500 |
| 2015 | $10,000 | $78,000 |
| 2016 | $5,500 | $68,000 |
| 2017 | $5,500 | $62,500 |
| 2018 | $5,500 | $57,000 |
| 2019 | $6,000 | $51,500 |
| 2020 | $6,000 | $45,500 |
| 2021 | $6,000 | $39,500 |
| 2022 | $6,000 | $33,500 |
| 2023 | $6,500 | $27,500 |
| 2024 | $7,000 | $21,000 |
| 2025 | $7,000 | $14,000 |
| 2026 | $7,000 | $7,000 |
This assumes you made no contributions. Withdrawals are added back on January 1 of the following year.
Worked examples
TFSA: Jun arrived in Canada in 2026 and opened a TFSA. A friend told him the limit was "over $100,000", so he put in $10,000. His room was only $7,000, the 2026 limit. The $3,000 excess costs $30 a month. If he removes it after 4 months, he owes about $120.
RRSP: Fatima had $10,000 of RRSP room and contributed $15,000. The first $2,000 of excess is not taxed. The other $3,000 costs $30 a month: about $180 if it stays 6 months.
Common mistakes newcomers make
- Using the "total since 2009" figure. The $109,000 total applies only to people who were 18+ residents every year since 2009. Newcomers start from the year they became resident.
- Withdrawing and re-contributing in the same year. A TFSA withdrawal only adds room on January 1 of the next year.
- Contributing after leaving Canada. Non-residents cannot contribute to a TFSA without a 1% monthly tax. See your TFSA after leaving Canada.
- Assuming RRSP room in the first year. RRSP room comes from the previous year’s Canadian earned income. See TFSA and RRSP room in your first year.
- Trusting CRA My Account in spring. CRA updates TFSA room once a year, so contributions made this year may not show yet. Keep your own record.
What to do if you over-contributed
- Withdraw the excess as soon as you notice. Each month you wait costs 1%.
- File the right form (RC243 for the TFSA, T1-OVP for the RRSP) and pay the tax.
- If it was an honest mistake, ask CRA to waive the tax and explain the steps you took.
To plan contributions that fit your room, see the RRSP vs TFSA calculator and the FHSA calculator.