TFSA contribution room calculator

Understanding your TFSA contribution room

The TFSA is easy to describe and easy to misuse. Your room depends on neither your income nor what you filed: it accrues on its own, year after year, and it survives withdrawals. What catches people out is the timing — not the arithmetic.

How your room accrues

Each year the federal government sets a contribution limit, indexed to inflation and rounded to the nearest $500. That limit is added to your room whether or not you hold a TFSA, and whether or not you filed a tax return.

Three conditions decide whether a year grants you room: it must be 2009 or later, since the TFSA did not exist before then; you must have turned 18 in it or earlier; and you must have been a Canadian resident at some point during it. Each of those grants the whole year — someone who turns 18 on December 30 receives that year's full limit, and so does someone who lands in Canada in November.

Unused room is never lost. It stacks indefinitely, which is why someone who has been an adult since 2009 and has never contributed has the full sum in the table below available today.

The withdrawal trap

Withdrawing from your TFSA gives the room back — but not immediately. The amount is added to your contribution room on January 1 of the following year, never in the year of the withdrawal.

This is the leading cause of accidental over-contribution in the country, and the scenario is always the same: you take out $10,000 in March for an unexpected expense, the expense does not happen, you put the $10,000 back in September. You are then over by $10,000 for four months, because that room does not return until January 1.

The rule has a less obvious practical consequence: if you expect to withdraw and re-contribute within a short span, withdraw in December rather than January. The room then comes back weeks later instead of almost twelve months later.

What an over-contribution costs

The Canada Revenue Agency charges 1% per month on the highest excess amount in each month, and it runs for as long as the excess remains. It is not a one-time fine: a $5,000 excess left for six months costs roughly $300.

The fix is to withdraw the excess as quickly as possible — every month started counts in full. Note the catch, though: that withdrawal only returns the room on January 1 next, like any other. Withdrawing an excess and putting it back the following month makes things worse rather than better.

The CRA issues a notice of assessment for the excess-amount tax, usually well after the fact. That is precisely why checking yourself is worth the few minutes: by the time the notice arrives, the penalty has been running for months.

Why the CRA's figure is out of date

Your room appears in My Account on the CRA's site. It is the official source, and it is also a lagging one: the amount shown is as of January 1 of the current year.

The reason is administrative. Your financial institution reports contributions and withdrawals to the CRA after the calendar year ends, not continuously. Everything you have done since January 1 — contributions and withdrawals alike — is therefore missing from the figure shown, often until the following spring.

In practice the CRA remains the only authority on your actual history: it is what knows how much you have contributed since 2009, especially if you have changed institutions. But to know what you can contribute today, you have to take its figure and apply the current year to it yourself. That is exactly what the calculator above does.

Residency, arriving in Canada and leaving

Room accrues for the years you were a Canadian resident for tax purposes. Someone who arrived in Canada in 2020 does not have room going back to 2009: their room starts in the year they arrived, which counts in full.

The reverse holds too. If you leave Canada you keep your TFSA and it continues to grow tax-free, but you stop accruing new room for the years you are a non-resident. And a contribution made while non-resident carries its own 1%-per-month penalty, separate from the over-contribution one.

Frequently asked questions

How much can I put in my TFSA if I have never contributed?

If you were 18 or older in 2009 and have been a Canadian resident since, you have the full sum of the annual limits since the TFSA was created. The table above gives the year-by-year detail and the running total. If you turned 18 later, your room starts from that year.

Does unused TFSA room expire?

No. Unused room carries forward indefinitely, with no time limit and nothing to claim. That is what lets someone who has never contributed hold a six-figure limit today.

When can I re-contribute after a withdrawal?

On January 1 of the year following the withdrawal. The amount withdrawn is added to your room then, on top of the new annual limit. Re-contributing it in the same year as the withdrawal puts you over, unless you already had enough unused room.

What happens if I contribute too much?

The CRA charges 1% per month on the highest excess in each month, for as long as it remains. A $2,400 excess therefore costs about $24 a month. The fix is to withdraw the excess promptly; the penalty stops in the month the excess is gone.

Do I need to file a tax return to accrue room?

No. Unlike the RRSP, whose room depends on your reported earned income, TFSA room accrues simply from being 18 and a Canadian resident. Filing is worth doing for other reasons, but it is not a condition here.

Do gains inside my TFSA reduce my room?

No. Growth inside the account — interest, dividends, capital gains — uses no contribution room. Only the amounts you put in count. And if you withdraw those gains, they are added to your room the following year like any other withdrawal.

I have several TFSAs at different institutions. How do I count them?

Room is personal, not tied to an account. Add up contributions across every TFSA at every institution, and do the same for withdrawals. A direct transfer between two of your own TFSAs is neither a withdrawal nor a contribution — provided the institutions process it as a transfer rather than you withdrawing from one to redeposit into the other.

At what age can I open a TFSA?

Room accrues from the year you turn 18 everywhere in the country. Opening the account, however, requires reaching your province's age of majority: 18 in Québec, 19 in some others. If you have to wait a year, the room is not lost — it is waiting for you.