TFSA, RRSP or FHSA in 2026: your room and the right choice

Your year of birth, the year you arrived in Canada, your province and your income are enough: the check gives your room in all three accounts and what an RRSP would really save you.

How we calculate · Who publishes this site

Year you arrived: it counts in full

Where you live on December 31

Salary or business income: it sets your 2026 RRSP room

Deposits minus withdrawals in past years

Buying a first home?

Your TFSA room available in 2026

$109,000

Room built up since 2009, over 18 years.

RRSP: new 2026 room (18% of 2025 income)$12,600
FHSA: first-year roomnot eligible here
Combined marginal rate, Quebec36.1%
Refund on $1,000 in an RRSP$361
Where to startRRSP first if your retirement rate will be lower

Your exact RRSP deduction limit is on your 2025 notice of assessment (it adds unused room and subtracts any pension adjustment).

How this is computed
2026 TFSA limit
$7,000
TFSA total since 2009
$109,000
2026 RRSP limit
$33,810
FHSA per year / lifetime
$8,000 / $40,000

In 2026, the annual TFSA limit is $7,000 and the total since 2009 reaches $109,000 for someone who was 18 and a resident of Canada in 2009 and has never contributed. An RRSP accepts 18% of your 2025 earned income up to $33,810, plus unused room carried forward; it takes $187,834 of income to reach that cap, which rises to $35,390 in 2027. The FHSA opens $8,000 of room a year from the day the account is opened, up to $40,000 over your lifetime, for a first home. Choosing between an RRSP and a TFSA comes down to one comparison: your marginal tax rate today, which the RRSP deduction saves, against your rate when you withdraw. With equal rates, both accounts leave the same amount after tax. The same $5,000 contribution on $75,000 of income cuts tax by $1,858 in Nova Scotia and by $1,375 in Nunavut: the province changes the answer. The 2027 TFSA limit has not been published yet.

This site does better than the top Google result (canada.ca) because it calculates what canada.ca only explains: your accumulated TFSA room from your year of birth and arrival in Canada, and the real tax saving of an RRSP or FHSA contribution with the 2026 federal brackets and those of each of the 13 provinces and territories, Quebec abatement included, in English and French, with nothing to sell.

The same RRSP in all 13 provinces and territories

The federal government charges the same tax everywhere, except in Quebec, where a 16.5% abatement reduces it. The gap comes from each province's brackets and rates. Click a province for its detailed page.

2026 combined marginal rate (federal and provincial) on ordinary income, and the tax saved by a $5,000 contribution on $75,000 of taxable income.
Province or territoryRate at $50,000Rate at $75,000Rate at $100,000Rate at $150,000Saved, $5,000 at $75,000
Quebec25.7%36.1%36.1%47.5%$1,806
Ontario19.0%29.6%31.5%45.0%$1,483
British Columbia19.6%28.2%28.2%40.7%$1,410
Alberta22.0%30.5%30.5%36.0%$1,525
Manitoba26.8%33.3%37.9%43.4%$1,663
Saskatchewan24.5%33.0%33.0%38.5%$1,650
Nova Scotia28.9%37.2%38.0%43.5%$1,858
New Brunswick23.4%34.5%34.5%42.0%$1,725
Newfoundland and Labrador28.5%35.0%36.3%41.8%$1,750
Prince Edward Island27.5%37.1%37.1%45.0%$1,855
Yukon20.4%29.5%29.5%36.9%$1,475
Northwest Territories19.9%29.1%29.1%38.2%$1,455
Nunavut18.0%27.5%27.5%35.0%$1,375

The only calculation that matters: two tax rates

An RRSP defers tax; a TFSA pays it up front. Money you put in an RRSP is deducted from your income, so your tax falls at this year's marginal rate; everything you take out later is taxed at the rate of the year you withdraw. A TFSA takes money that has already been taxed, and nothing is taxed after that, neither growth nor withdrawals. If the two rates are the same, the result after tax is the same: saving $5,000 in Ontario, at $75,000 of income now and in retirement, the TFSA is worth $10,469 after 25 years and the RRSP, once the tax on the withdrawal is paid, $10,469.

So everything turns on the gap between the two rates. Someone earning $95,000 in Quebec who expects $32,000 of taxable income in retirement saves 36.1% today and will pay about 25.7% on withdrawal: the RRSP leaves $1,709 more after tax for the same effort. In Nunavut, on $40,000 of income, the deduction is worth only 18.0%; if retirement income is higher, the TFSA wins by $844. The RRSP vs TFSA calculator runs this with your own numbers.

The calculation assumes something people often forget: the RRSP refund has to be saved too. Putting $5,000 in an RRSP and spending the refund means saving less than $5,000 in a TFSA. The calculator therefore compares equal effort: the RRSP contribution is grossed up by the refund it produces. One difference does not show in the numbers: TFSA money can come out at any time without tax and the room returns the next year, whereas an RRSP withdrawal before retirement is taxed and its room is gone for good. For an emergency fund or a goal less than five years away, the TFSA almost always comes out ahead.

Why your province changes the answer

At $60,000 of taxable income, the combined marginal rate is 28.5% in Alberta, 29.6% in Ontario and 36.1% in Quebec. The first dollar of RRSP deduction is therefore worth more in Quebec than in Alberta. Three mechanisms explain the gap. Each province sets its own brackets and rates: Alberta created an 8% bracket in 2025, Prince Edward Island added a 20% bracket in 2026, British Columbia raised its lowest rate to 5.6%. The basic personal amount ranges from $11,932 in Nova Scotia to $22,769 in Alberta. And Quebec collects its own income tax, which cuts the federal tax of its residents by 16.5%.

Your 2026 combined marginal rate

2026 combined marginal rate, Quebec

36.1%

Federal share (after the 16.5% abatement)17.1%
Quebec share19.0%
Total tax on this income$14,812
Average rate21.2%
Open the full calculator →

Benefits that follow your income

An RRSP or RRIF withdrawal is taxable income; a TFSA withdrawal is not. That matters for income-tested benefits, but it should not be overstated. The Guaranteed Income Supplement only concerns retirees with low income: under $23,112 for a single person. For them, every dollar taken from an RRSP reduces the supplement, and the TFSA is nearly always the better account. At the other end, the Old Age Security pension is recovered at 15% above $95,323 of net income: only well-off retirees are affected. In between, most retirees lose nothing by drawing on their RRSP.

During your working years, the effect runs the other way. An RRSP or FHSA deduction lowers family net income, and the Canada child benefit rises in the following benefit year: up to 23% of the deduction for a family with four children in the first reduction band. The RRSP and child benefit page shows the calculation.

The FHSA first, if you are buying a first home

The FHSA combines the best of both accounts: contributions are deductible like an RRSP, and a withdrawal to buy a first home is not taxed, like a TFSA. Nothing has to be paid back, unlike the Home Buyers' Plan. Room only builds from the day you open the account: opening it as soon as you qualify, even without contributing, gives $8,000 of room a year, of which $8,000 can carry forward. If the purchase does not happen, the balance can be moved to an RRSP without using RRSP room. The FHSA calculator tracks your room year by year.

TFSA

  • TFSA contribution roomYour room since 2009, the year you turned 18 or the year you arrived: up to $109,000 in 2026.
  • TFSA limitThe 2026 annual limit is $7,000; $109,000 in total since 2009. Year-by-year table.
  • TFSA for newcomersNew to Canada? Your room starts the year you become a resident, with no proration: $7,000 for 2026.
  • TFSA over-contributionPutting in more than your room costs 1% a month on the month's highest excess. The math and how to fix it.
  • TFSA withdrawalA TFSA withdrawal is tax-free and comes back as room on the following January 1. What to check before you put the money back.
  • TFSA for non-residentsAfter you leave Canada, your TFSA can stay open, but it stops earning room and any contribution costs 1% a month.

RRSP

  • RRSP vs TFSAThe winner is the account taxed least on the way out: a side-by-side comparison with your province's 2026 brackets.
  • RRSP limit$33,810 in 2026, $35,390 in 2027: the dollar limit, and how your own deduction limit is worked out.
  • RRSP tax refundHow much your contribution cuts your 2026 tax, federal and provincial, at your marginal rate.
  • RRSP deadlineMarch 2, 2026 for the 2025 tax year, March 1, 2027 for 2026: the 60-day rule and what happens after.
  • RRSP over-contributionA $2,000 cushion, then 1% a month on the rest, Form T1-OVP: how to work out an excess and fix it.
  • RRSP withdrawal tax10% to 30% withheld at source, then the real tax at your marginal rate when you file.
  • Spousal RRSPContributing to your spouse's or partner's RRSP with your own room, and the 3-year rule before a withdrawal.
  • RRSP, OAS and GISAn RRSP or RRIF withdrawal counts for the OAS clawback above $95,323 and for the GIS; a TFSA withdrawal does not.

FHSA, HBP, LLP

  • FHSA$8,000 a year from the day you open it, $40,000 for life: your 2026 room and the tax the deduction saves you.
  • FHSA vs HBPA final tax-free withdrawal, or a loan from your RRSP repaid over 15 years: the two can be combined for the same home.
  • Home Buyers’ PlanUp to $60,000 from your RRSP for a first home, repaid over 15 years: starting in 2031 for a 2026 withdrawal.
  • Lifelong Learning Plan$10,000 a year and $20,000 in total from your RRSP for your studies or your spouse's, repaid over 10 years.

Tax and benefits

  • Marginal tax rateThe combined federal and provincial rate on your next dollar, in all 13 provinces and territories, compared with your average rate.
  • RRSP and child benefitAn RRSP or FHSA deduction lowers family net income and raises the Canada child benefit from the following July.

Before you put money in

Where to find your official room

The Canada Revenue Agency shows your TFSA room and your RRSP deduction limit in My Account and on your notice of assessment. Those figures come from the returns filed by financial institutions and from your last tax return, so they cannot see this year's transactions. Your 2026 RRSP deduction limit is on your 2025 notice of assessment; it adds your unused room to the new room for the year and subtracts the pension adjustment if you belong to an employer pension plan. The check on this page redoes the count from your own amounts, so you can verify a figure or plan the next year. If the two disagree, your own record of contributions and withdrawals is what counts, and the agency corrects its figure on request.

Mistakes that cost 1% a month

The TFSA and the FHSA have no buffer: every dollar above your room is taxed at 1% a month for as long as it stays in the account. The most common mistake is taking money out of a TFSA and putting it back the same year, thinking the withdrawal freed up room: it only does so on the next January 1. An RRSP tolerates an excess of $2,000; beyond that, the same 1% monthly tax applies and Form T1-OVP must be filed within 90 days after the end of the year. The TFSA over-contribution and RRSP over-contribution pages show the penalty and how to stop it.

RRSP or TFSA on a low income

Below $16,452 of taxable income, you pay no federal income tax and little or no provincial tax, so an RRSP deduction would save little or nothing this year. The contribution is not wasted: you can contribute now and wait for a better-paid year to claim the deduction. For a student, a newcomer or a part-time worker, the TFSA is the natural account: it needs no earned income, withdrawals are not taxed and the room you withdraw comes back the following year. RRSP room still builds whenever you have earned income and file a return, even if you do not contribute.

What the calculators leave out

The tax model applies the 2026 brackets, each jurisdiction's basic personal amount, the Quebec abatement and the Ontario surtax. It leaves out other credits (CPP or QPP and EI contributions, the Canada employment amount, the age amount, the pension income amount), the low-income tax reductions of Ontario and British Columbia, the Ontario Health Premium and the alternative minimum tax. Those matter mostly below $30,000 of income or with large capital gains. The method page lists every rule and its source.

What changes in 2027

The 2027 RRSP dollar limit is already set at $35,390, reached with $196,612 of 2026 earned income. The 2027 TFSA limit has not been announced: it is indexed to inflation and rounded to the nearest $500, and the agency usually publishes it in late November. The 2027 tax brackets will be indexed in January, except in British Columbia, which has paused indexation from 2027 to 2030, and in Manitoba, where brackets have been frozen since 2025. The calculators will be updated on the day of the official announcements, with no projection before then.

Common questions

What is the TFSA limit for 2026?

The annual limit is $7,000 in 2026, the same as in 2024 and 2025. Added up since the TFSA started in 2009, the limits reach $109,000. That total is only available to someone who was at least 18 in 2009, already lived in Canada and has never contributed. The 2027 limit has not been published yet.

Is it better to put money in an RRSP or a TFSA?

Compare your marginal tax rate today with the rate you will pay when you withdraw. If you will be taxed less in retirement, the RRSP leaves more money; if you will be taxed the same or more, the TFSA wins. A low income now, a short-term goal or the risk of losing the Guaranteed Income Supplement later all point to the TFSA.

How much can I contribute to my RRSP in 2026?

Your 2026 deduction limit is 18% of your 2025 earned income, up to $33,810, plus unused room from past years, minus any pension adjustment. The exact figure is on your 2025 notice of assessment. You can go $2,000 over that limit without a penalty, but that part is not deductible until new room absorbs it.

Can I have a TFSA, an RRSP and an FHSA at the same time?

Yes, the three accounts are separate and each has its own room. An eligible person can put up to $7,000 in a TFSA, $8,000 in an FHSA and their deduction limit in an RRSP in the same year. The FHSA and the Home Buyers' Plan can also be used for the same home. The only shared limit is how much you have to save.

How big is the tax refund on an RRSP contribution?

The contribution lowers your tax at your combined federal and provincial marginal rate. On $75,000 of income, $5,000 saves between $1,375 and $1,858 depending on the province. It only arrives as a cheque if the tax withheld from your pay exceeds the tax you owe; otherwise it simply reduces the balance you pay.

Do TFSA withdrawals affect Old Age Security?

No. TFSA withdrawals and income are not counted in the income used for Old Age Security, the Guaranteed Income Supplement, the Canada child benefit, Employment Insurance or the GST/HST credit. An RRSP or RRIF withdrawal is taxable income and does count in those calculations, which matters most for low-income retirees.

Is this site connected to the Canada Revenue Agency?

No. It is an independent site published by Radif Partners, with no link to the Canada Revenue Agency, Revenu Québec, any government, bank or insurer. Limits and tax tables are taken from official publications, cited on every page. Results are estimates: your official room is on your notice of assessment.

Official sources for this page

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Independent publisher of TFSA, RRSP and FHSA calculators built on the limits published on canada.ca and the federal, Quebec and provincial tax tables

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