Contributing to employer group RRSP the year you arrive in Canada

Hi all,

I arrived this year (2021) and I’m wondering if I can contribute to my employer’s Group plan RRSP starting now? I understand that when I file taxes next year (2022) for this year (2021) I cannot DEDUCT the contributions, but can I contribute to the RRSP this year in the first place?

If not, then are the employer’s matching contributions forgone for this year 2021? Does anybody have experience on this?


No you can’t ordinarily contribute to a RRSP unless you have contribution room.

You get contribution room after filing taxes.

So for the first year it’s a wash. You can transfer your foreign retirement plan into a RRSP though. That doesn’t count against your contribution room.

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For employer matching part, you can check if ur payroll company can contribute to a regular account. In Jan 2022, you can transfer that money to RRSP account. That way, you wont lose employer’s matching contributions for this year. There are no tax benefits for 2021. Process is a bit of work for payroll, so it might be YMMV.
You do have TFSA room from 2021 so you can use that.

I’ve been contributing about 4% of my salary (since my company this % as well) and also opened up an RRSP account on WealthSimple. Could you explain what you mean by it would be a wash in the 1st year? Thanks :slight_smile:

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If you’ve never filed taxes in Canada before this, then what you’re doing isn’t a good idea.

I’d recommend chatting with a tax professional in your area about this to avoid complications or penalties at tax time.

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Since, this is your 1st earning year in Canada, you don’t have any RRSP contribution room for current year. It is little weird, but that how it is.

CRS levy penalty for over contribution to RRSP and can do the same in your case. Plus, any tax benefits accrued will have to be adjusted(paid back) at time of tax filing for year 2021. So, as @panditji suggested talk to tax professional or maybe your payroll team. They should be able to guide you.

Will do. Thank you @panditji & @rndmdude. I wasn’t aware of this.

All the best, since payroll wouldn’t have reported these to CRA yet I think it might be possible for them to unwind these. Otherwise follow the tax professionals guidance in terms of a withdrawal and maybe a proactive communication with the CRA if needed.

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I researched a lot on this topic, spoke to an H&R tax professional and found this out. You cannot contribute to an RRSP account the first year you start earning in Canada. You will get the contribution limit in your Notice of Assessment (NOA) after you file your taxes. So you can only start contributing to it from the second year. Wealthsimple has a nice little calculator that allows you to calculate your contribution limit for both TFSA and RRSP accounts.

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Folks - How about RPP (pension plan)? Is there any limitation that allows no contribution for the first year? Does the same holds true for TFSA?

So HR got in touch with our pension plan administrator. It turns out that the plan is actually an RPP (registered pension plan) so the contribution room is based on 18 % of the current years’ income so I’m fine there :slight_smile: phew!

I just opened an RRSP with wealthsimple last month so I’m going to see what I can do to reverse this ASAP. I’ve read that you can overcontribute up to 2000$ and that buffer zone is provided but I’d rather be safe than sorry so will contact a tax advisor through our employee assistance program. Thank you all for looking out for everyone here :slight_smile:


Based on your response, I think I should be good as well since I opened up an RPP via my employer.

@MissMapleFry do let us know what the tax advisor advices you.

I’m also very curious to know the relationship between a RPP and a RRSP. I would love to know if we can contribute to both these tools in the same year and what impact if any that has on RRSP limits for the next year.

Unfortunately my employer doesn’t offer a RPP so I’m out of luck but if both these can be contributed in parallel then that would definitely be a great way to save both for retirement as well as on taxes.


I am not sure why you are asking for relationship between RPP and RRSP…

RPP is a employer based plan… but RRSP is your individual plan… RRSP limits change every year according to your previous years income…

I’m just trying to understand what retirement vehicles are and how they interact with each other.
If both have an 18% limit then you could technically reduce your taxable income by 36% which sounds too good to be true.

Will do!

RRSP is definitely upto 18% of previous year income but with maximum till near $27000…

EPP - I don’t think it is 18%… it is something near about $3000 for entire year for both employer and employee contribution if salaray is about $60K so it should be near 5% i guess

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Any contribution to RPP, RRSP, Group RRSP etc. In total should not exceed 18% or 27K. It’s not 18% each.

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RRSP contribution room $0 (+$2000 lifetime excess limit allowed per CRA) for 2021 since started working for the 1st time moved in Jul 2021.

Without knowing the contribution room concept assuming RRSP same as 401K, enrolled in RRSP thru employer on day1 with 5% payroll deductions and 5% employer match after 90days. My current account balance currently sits at ~$1200 as of today plus elected bonus deposit to RRSP which will make it >$2K. There is No RPP provided by employer (only RRSP).

Now, after reading this thread, realized I already overcontributed excluding lifetime $2K excess limit. Also, I will come under non-resident for tax purposes due to stay in Canada for less than 183 days in the tax year (2021) per

I know one of the option would be stop contributing immediately so the balance will sit at $1.2K, won’t exceed $2K (lifetime limit allowed).

The other option is to pay 1% penalty for each month exceeding contribution room so in my case balance exceed $2K approximately starting October so the penalty levied for Oct, Nov & Dec months that need to be paid by Mar 2022 as the contribution room becomes 18% of 2021 income starting Jan 2022 per

I’ve an upcoming appt this week with RRSP advisor thru employee assistance program, but fingers crossed.

considering taking advantage of employer 5% match and non-resident for tax purpose, Can anyone share their experiences to go for any better options in my situation?

Tagging experts…
@panditji @rangarajanm @srhere @MissMapleFry @rndmdude @jayhop @avj @j9lad @usa2can

I’m no expert but am definitely curious as to how you resolve this. So please share an update after your discussion.

Given that the tax year isn’t done, can’t your payroll department undo these contributions? That might be some work for them but might be the most straightforward thing for you.