Key takeaways
- TFSA: $7,000 for 2026, not prorated in the year you become a resident (age 18+, valid SIN)
- No TFSA room for years before you became a resident
- RRSP: 18% of last year’s earned income, up to $33,810 for 2026 and $35,390 for 2027
- Arrival-year RRSP room is usually $0
- Over-contributions are taxed at 1% a month
TFSA room in your arrival year
A Tax-Free Savings Account (TFSA) lets your savings grow tax-free. You can open one if you are a resident of Canada, 18 or older, and have a valid Social Insurance Number (SIN).
The CRA’s TFSA guide says the TFSA dollar limit is not prorated in the year you become a resident. So if you arrive on December 1, 2026, you still get $7,000 of room for 2026. But room does not build for years you were a non-resident for the whole year. You do not get room back to 2009.
| Year | TFSA limit | RRSP dollar limit |
|---|---|---|
| 2024 | $7,000 | $31,560 |
| 2025 | $7,000 | $32,490 |
| 2026 | $7,000 | $33,810 |
| 2027 | Not yet announced | $35,390 |
RRSP room for newcomers
Your Registered Retirement Savings Plan (RRSP) room for a year is 18% of your earned income from the previous year, up to that year’s dollar limit, minus any pension adjustment from a workplace pension. Unused room carries forward.
For newcomers, earned income generally counts only from when you were a resident (plus any Canadian employment income before that). That means:
- Arrival year: usually $0 of RRSP room, because you had no Canadian earned income the year before.
- Second year: 18% of what you earned after you arrived.
Your notice of assessment shows your exact RRSP limit. Compare accounts with our RRSP vs TFSA calculator.
How the calculator counts
- Adds $7,000 of TFSA room for each year from your arrival year to 2026, if you were 18 or older in that year.
- Calculates RRSP room for each year as 18% of the previous year’s earned income (your inputs), capped at the dollar limit, minus your pension adjustment.
- Shows an estimate of new RRSP room for 2027 using the 2027 limit of $35,390.
It assumes you made no contributions or withdrawals. If you did, subtract contributions; TFSA withdrawals are added back on January 1 of the next year.
Worked example
Lin became a resident on June 1, 2025, at age 33. She earned $45,000 from June to December 2025 and $70,000 in 2026.
- TFSA: $7,000 (2025) + $7,000 (2026) = $14,000 available in 2026.
- RRSP: $0 for 2025. For 2026: 18% × $45,000 = $8,100. For 2027: 18% × $70,000 = $12,600.
Common newcomer mistakes
- Counting room from 2009. Online calculators often assume you were here since age 18. Your room starts in your arrival year.
- Contributing to an RRSP in your arrival year. You usually have no room yet, so the contribution is an over-contribution beyond the $2,000 cushion.
- Re-contributing a TFSA withdrawal in the same year. Withdrawals only come back as room on January 1 of the next year.
- Holding US shares in a TFSA. This is allowed, but US dividends in a TFSA usually have tax withheld that you cannot get back.
Don’t forget the FHSA
If you plan to buy your first home in Canada, a First Home Savings Account (FHSA) gives a tax deduction like an RRSP and tax-free withdrawals for a home like a TFSA. Contributions are up to $8,000 a year and $40,000 over your lifetime. Room starts only when you open the account, so opening one early helps. Try the FHSA calculator.
Worried about putting in too much? Use the over-contribution calculator.