RRSP, employer-associated vs. individual

Hi All,

My employer matches up to 3% on RRSP, so I’m considering contributing a 3% as well. I have a few questions:

  1. After contributing 3% with another 3% matched by my employer to my work-related RRSP account, can I contribute the remainder12% (18% - 3% - 3%) to my own RRSP investment account?

  2. If yes to #1, the 12% would be post-tax initially since I would be using my post-tax income towards my individual RRSP account - would this be accounted for when filing taxes the following year?

  3. If I decided to invest the 12% in US stocks, would I need to do the currency conversion myself to ensure the investment does not exceed the threshold - are there guidelines available for doing that?

Looking forward to hearing your thoughts.


  1. Yes, but 18% is your limit. So, you can contribute 18-3=15%.

  2. When you file tax-returns, you get relevant rebates.

  3. You will probably have a specific RRSP account with a brokerage and contribute to it in CAD. Let’s say you put 1000 CAD, then that is what will be recorded off your annual limit.
    For anything in USD your brokerage with calculate the price+conversion fees+brokerage fees etc.

1 Like

Hey guys, I have a question about RRSP. I started working in Canada towards the end of 2020. I had no Canadian income before that. Is my RRSP contribution limit for the tax year 2020 (Jan 1 - Dec 31, 2020) dependent on my 2020 income or 2019 income? I keep reading that it’s based on the previous year’s income on the internet and it’s very confusing when they say it’s based on previous year’s income. In other words, am I eligible for any RRSP contribution for tax year 2020?

Previous year’s income. Eg. for 2020 that’d be calculated based on your income in 2019’s T4.

You can find your limits on the MyCRA website: https://www.canada.ca/en/revenue-agency/services/e-services/e-services-individuals/account-individuals.html

Does that mean I can’t take any RRSP deduction when I file 2020 taxes?

Afraid not - need to stick to the limits. On the bright side, you’ll be in a higher tax bracket next year and will be able to maximize your tax refund.

Sorry for another follow up question but to clarify: when I file my taxes in 2022 for the tax year 2021, the maximum RRSP deduction is 18% of my 2020 income, is it?

If it is, I find it really weird that I can’t contribute to RRSP in the year I am earning my income just because I didn’t have any income in the previous year. It also means anyone who is entering the workforce after college (assuming they had no summer/part-time jobs during college) will not be able to contribute to RRSP until they complete one year of employment.

Yes and another thing to consider is that unused contribution room carries over. However we need to consider that RRSP is meant to be a tool for retirement and defer tax payments. You do not pay when you’re young and have a higher income potential (and therefore potentially higher taxes) - only when you withdraw - likely at a much older age, when you’re retired and with minimal income at a low tax bracket.

If you’re looking to invest and save on taxes, also consider a TFSA, where the contribution room grows as long as you’re a Canadian resident (regardless of income).

Thanks. Yes, TFSA is great for tax free growth and I’m on course to hitting the limit. With RRSP, I was really hoping to reduce my taxes. This is so different from 401k and IRA in the US where it’s based on current year’s income, not the previous year’s. I wonder if the same rule applies to Group RRSP as well.

Yup group RRSP adds to the same limit, to my understanding. Both your own contributions and your employers amount add to the limit.

yes, and there is a cap on it, somewhere around 28K if I remember correctly.