Stock news for investors: Laurentian bank and BRP + MORE Jun 6th
Stock news for investors: RBI earnings rise as Tim Hortons and international growth boost results + MORE Nov 1st
Retirement taxes explained: Withholding, clawbacks, and other surprises Sep 19th
Stock news for investors: Cineplex and Aritzia post strong results despite industry headwinds + MORE Oct 11th
Should we draw down my spouse’s RRIF faster? May 30th
What is the RRSP contribution deadline in 2025?
– moneysense.ca
RRSP season is in full swing—have you contributed to your account? Although Canadians can make contributions to their registered retirement savings plan anytime of year, your last chance to do so for a specific tax year is the 60-day period after the end of the calendar year. This year, the last day falls on a weekend, so the RRSP contribution deadline for the 2024 tax year has been moved to Monday, March 3, 2025.
If you’re opening an RRSP for the first time, consider the pros and cons of different accounts to understand what suits you best. For example, some accounts pay interest on deposits or offer guaranteed investment certificates (GICs), while others allow you to invest in other financial instruments like stocks or bonds—more on that later in the article.
What are your 2024 and 2025 RRSP contribution limits?
Your RRSP contribution limit each year is the total of:
Your unused RRSP contribution room from previous years.
Plus, 18% of your earned income from the previous tax year (check your notice of assessment from the Canada Revenue Agency), or the annual maximum set by the government, whichever is less…
How your net income gets calculated for tax and OAS
– moneysense.ca
Appreciate your article on OAS (Old Age Security). Can you tell me how net income is calculated? For example, if I have $100,000 in pension income and $30,000 was deducted for income tax, is my net income $70,000? —Kevin
Calculating net income for tax and OAS purposes
I like your definition of net income, Kevin. It sounds logical. But it is not the definition the Canada Revenue Agency (CRA) uses. The general, very abbreviated, format for calculating personal income tax is shown below. You will see how net income is calculated.
Total income – Deductions = Net income
(Start of OAS clawback threshold, $93,454 for 2025, is measured here.)
Net income – Tax credits = Federal tax
Federal tax x Provincial tax rate = Provincial tax
Total tax = Federal + Provincial + Federal and provincial surtaxes
I’m showing the skinny tax return so you can see how your personal tax is calculated and not just your “net income.” It’s important to see because for most people income tax will be the largest expense they will ever have…
