Each year, thousands of Canadians scramble to make a last-minute RRSP contribution before the deadline. If that’s you, here is everything you need to know about your RRSP contribution, starting with the last day you can contribute for the 2022 income tax year.

What’s the RRSP contribution deadline for 2022?

The RRSP contribution deadline for the 2022 tax year is March 1, 2023. This is the last day that registered retirement savings plan contributions can be used to reduce your taxable income for 2022.

If you turned 71 in 2022, the last day you could contribute to your RRSPs was December 31, 2022. That’s because you must convert any existing RRSP accounts to a Registered Retirement Income Fund (RRIF) by December 31st of the year in which you turn 71. You cannot contribute to a personal RSP plan after that year, even if you have earned income.

However, if you have a younger spouse, you can contribute to their spousal RRSP plan until the end of the year when they turn 71.

When will I receive my RRSP tax slips?

Your financial institution will mail out tax receipts as required shortly after the following dates: December 31, Jan 31, and March 1st. Here’s how it works:

Tax slip dates

December 31, 2022: The date that most financial institutions mail tax slips for RRSP contributions made between March 2nd and December 31st. You should receive your slip around mid-January.

Jan 31st, 2023: If you made an RRSP contribution during the month of January (current year), you should receive a tax slip for that amount by mid-February. You can claim this amount as an RRSP deduction for the 2022 tax year.

March 1st, 2023: If you make an RRSP contribution between February 1st and the deadline (March 1st, 2023), your financial institution will mail your final tax slip sometime in early March. If you haven’t received your tax slip before the end of March, follow up with your RRSP provider.

What is my RRSP contribution limit?

For 2023, your RRSP contribution limit will be 18% of your previous year’s earned income, up to a maximum of $29,210 for 2022. Note: In 2024, the maximum limit for the 2023 tax year will increase to $30,780.

If you contribute to a company pension plan, it will go against your contribution limit.

What about my unused contribution room?

With RRSPs, any unused contribution room is carried forward and can be used in future years. You may have plenty of available contribution room if you don’t normally maximize your RRSP contributions.

To find your overall contribution room, check your Notice of Assessment document, log in to the Canada Revenue Agency (CRA) My Account portal online, or contact the CRA by telephone.

How do RRSP deductions work?

When you deposit money into an RRSP, your taxable income is reduced by the amount you contribute as long as you claim the RRSP deduction on your income tax return.

For example, let’s say you earned $60,000 in 2022. If you contributed $5000 to your RRSP account between March 2nd, 2022, and March 1st, 2023, you would be able to claim $5000 as an RRSP deduction on your 2022 income tax return. This would reduce your income to $55,000 for tax purposes and reduce the income tax you must pay.

How much tax can I save with an RRSP contribution?

Depending on your marginal tax rate, you can get between 20% and 50% of your RRSP contributions back in the form of an income tax refund. The higher your marginal rate, the higher the tax savings.

Should I take out an RRSP loan?

Sometimes, it makes sense to borrow money for the purpose of contributing to an RRSP. But rather than applying for a personal loan or borrowing money from a line of credit, you can take out an RRSP loan.

Most banks and credit unions offer RRSP loans at favourable interest rates and with flexible payment arrangements. You may decide that an RRSP loan is the best option for a couple of reasons.

If the RRSP deadline is approaching, but you lack sufficient cash resources to make a contribution, an RRSP loan can help.

Some people will take out larger RRSP “catch-up” loans if their RRSP is underfunded and they want to accelerate their retirement savings. Always speak to a tax professional before making the decision to borrow for RRSPs, to make sure it’s in your best interest. Also, check your lifetime RRSP contribution room to ensure you have enough available to accommodate a large contribution.

Most RRSP loans are offered with a one-year repayment term, but larger “catch-up” loans can have repayment periods of up to 5 years or longer.

Remember that the corresponding tax deduction is a one-time benefit when you take out an RRSP loan. However, you’ll have to make payments on the loan until it’s repaid in full.

It may be a good idea to apply any income tax refund against your RRSP loan balance to speed up repayment and reduce the amount of interest you pay on the loan. This article has more information on RRSP loans.

Where should I invest my RRSP?

You can open an RRSP account with just about any bank, credit union, or investment company in Canada. However, your investment options are often limited, depending on the institution you deal with.

If you don’t mind managing your investment portfolio, an online brokerage offers the most flexibility regarding RRSP investment options.

Two online brokers I recommend are Questrade and Wealthsimple. You can open an account online (no need for an in-person visit to your bank) and start trading as soon as your account is activated.

With an online broker, you can invest in stocks and bonds, ETFs, mutual funds, and even GICs. The best part is that they keep fees to a minimum.

Questrade, for example, offers commission-free ETF purchases and stock trades as low as $4.95 each. Wealthsimple Trade offers free trades for Canadian stocks and ETFs.

Get started with Questrade or Wealthsimple Trade today.

RRSP contribution deadline: Final thoughts

If you need to contribute to your RRSP for the 2022 tax year, there’s still time. But before you do, check with the CRA to ensure you have the available contribution room. If you find yourself scrambling at the last minute every year, consider contributing to your RRSP throughout the year via an automatic purchase plan.