RRSP Overcontribution Penalty Calculator

Employer and spousal-plan contributions count when comparing unused contributions with your limit. The $2,000 amount is a cushion, not extra deductible room.

Which number the tax actually runs on

The comparison is not "what did I put in this year". You have an excess when your unused RRSP, PRPP and SPP contributions carried in from prior years plus your contributions in the current year exceed the RRSP deduction limit shown on your latest notice of assessment or reassessment, or on Form T1028, plus $2,000. Because a contribution stays "unused" until you actually claim the deduction, deliberately holding contributions back to deduct in a higher-income year is what pushes many people over — the money is sitting in the plan and counting the whole time.

Contributions you make to a spouse's or common-law partner's RRSP or SPP also count against your own limit, as do employer contributions to a PRPP. For 2026 the room a year of earnings can generate is capped at $33,810 (18% of the prior year's earned income up to that dollar limit), less any pension adjustment, so a large bonus year does not lift the ceiling as far as people expect.

When the 1% does not apply

The CRA lists narrow situations where you may not owe the tax on all of an excess: you withdrew the excess before the end of the month in which the contribution was made, the contributions were qualifying group plan amounts, or they were made before February 27, 1995. Amounts withdrawn under the Home Buyers' Plan or the Lifelong Learning Plan do not get you out of it — the 1% can still apply to the full excess.

Filing the T1-OVP — and the documentation trap

The tax goes on a T1-OVP, or the simplified T1-OVP-S where it is available, one return for each year involved, filed and paid within 90 days of the year end. The part that catches people is evidence: the CRA needs documents showing the exact month of every contribution and every RRSP, PRPP, SPP or RRIF withdrawal, and it says plainly that RRSP receipts and T4RSP and T4RIF slips do not contain that information. If you cannot supply the months, the CRA may assess from its own records — treating first-60-day contributions as January, the rest of the year as March, and withdrawals as December — an assumption that maximises the number of taxable months. Bank or plan statements showing dated transactions are the fix.

Correcting the excess

Leaving unused contributions in the plan is allowed; it just keeps the 1% running for every month they remain above the line. Most people withdraw instead, using Form T3012A to avoid withholding or Form T746 to claim the offsetting deduction afterwards, and file Form RC2503 to ask for the tax to be waived where the error was reasonable. If you have already filed something incorrect, the Voluntary Disclosures Program may be available — but not once the CRA has started a review.