Decision centre
Registered Account Overcontribution Centre
The tax rate looks similar across accounts, but the cushion, monthly balance rule and correction forms are not the same.
TFSA excess contribution
No cushion; estimate 1% on the highest monthly excess.
Open this tool → T1-OVPRRSP excess contribution
Apply the $2,000 cushion and estimate the T1-OVP tax.
Open this tool → RC727FHSA excess contribution
Estimate 1% monthly tax and review designated corrections.
Open this tool → Prevent itRebuild TFSA room
Confirm annual limits, withdrawals and recontribution timing.
Open this tool →How to use this group
First rebuild contribution room from CRA records and your own current-year transactions. CRA account information can lag financial-institution reporting.
Then calculate the excess month by month and remove or designate the amount using the account-specific process.
Frequently asked questions
Is there a cushion before the overcontribution tax applies?
RRSP has a lifetime $2,000 cushion above your deduction limit before the 1% monthly tax starts. TFSA and FHSA have no cushion — any excess, even $1, is taxed at 1% per month it stays in the account.
How is the 1% monthly overcontribution tax calculated?
CRA applies 1% to the highest excess amount in the account during each calendar month you were over the limit, not just the excess on December 31. A short-lived spike still counts for that month.
Which CRA form do I file for an overcontribution?
RRSP excess uses Form T1-OVP. TFSA excess uses Form RC243. FHSA excess uses Form RC727. Each form calculates and remits the 1% monthly tax directly to CRA — you do not add it to your regular T1 return.
How do I fix an overcontribution once I find it?
Withdraw the excess amount as soon as possible — the tax accrues monthly until it is removed, and for TFSA/FHSA the room is not automatically restored until the following calendar year. Consider requesting a waiver of the tax if the error was reasonable and you acted quickly.