TFSA contribution room calculator

by Ann deBruyn

TFSA contribution room calculator

Find out your current tax-free savings account (TFSA) contribution limit by using this calculator. Note that in the second box below, you should not “double count” contributions that you have withdrawn and then legitimately re-contributed in the following calendar year or beyond, as this could lead to a false over-contribution warning.

Available TFSA contribution room:

This Year:

Next Year:

* Note that the calculator assumes next year's contribution limit will be the same as this year’s.

This tool is designed for future planning purposes only and cannot account for past adjustments to contribution room due to withdrawals (other than those made within the past year). If you think you might be close to your allowable contribution room limit please contact the Canada Revenue Agency to verify this information.

How does a TFSA work?

TFSA is a bit of a misnomer. While you can use it for straightforward savings, think of it more accurately as an investment holding account to store things like exchange-traded funds (ETFs), guaranteed investment certificates (GICs), bonds, stocks and, yes, plain-old cash. While you do have to abide by the set amount of contribution room each year, any gains you earn on those investments will not affect your contribution room for the current year or years to come. Plus, the income earned is tax-free (more on that below). Any resident of Canada, over the age of 18, with a valid social insurance number can open a TFSA.

Is a TFSA really tax-free?

TFSA contributions won’t reduce your taxable income, unlike registered retirement savings plan (RRSP) contributions . (If you haven’t maxed out your RRSP, get on that before the deadline). However, where you do save on taxes with a TFSA is that the money you earn inside your TFSA is not taxable. That means income from things like interest, stock dividends or capital gains aren’t subject to income tax. Any income earned in the account—even when it is withdrawn—is generally tax-free. (TFSA vs RRSP: How to decide between the two.)

Compare the Best TFSA Rates in Canada*

How does TFSA contribution room work?

Your TFSA contribution room is the maximum amount you can contribute to your TFSA for any given year. Your contribution room and your age affect the amount of contribution room you have. You begin accumulating from the year you turn 18 (and are a resident of Canada), even if you didn’t file income tax that year or open a TFSA yet.

Your contribution room is the total amount of the following:

    • The TFSA dollar limit for the current year
    • Any contribution room you have leftover from previous years
    • Any withdrawals made from your TFSA in the previous year

The TFSA contribution limit for 2022 is $6,000, if you turned 18 before the year 2009, your maximum lifetime TFSA contribution limit will be $81,500. If you take money out of your TFSA, you get that room back on January 1 the following year. Just don’t go over your limit.

What happens if you over-contribute to your TFSA?

If you exceed your contribution limit, you’ll be subject to a 1% penalty tax per month for each month the excess amount remains in your account. Luckily, this 1% tax only applies to the amount that’s been over-contributed.  

Updated February 2022.

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