CRA Tax Changes for RRSP and TFSA in 2025

As we step into 2025, the Canada Revenue Agency (CRA) has introduced key updates to contribution limits for both Tax-Free Savings Accounts (TFSAs) and Registered Retirement Savings Plans (RRSPs). These changes can have a significant impact on your savings strategy, so let’s break them down.

TFSA Contribution Limit for 2025

The annual TFSA contribution limit for 2025 remains at $7,000, the same as in 2024. This consistency allows Canadians to continue growing their savings tax-free.

For those who have been eligible since the TFSA was introduced in 2009 and have never contributed, the total cumulative contribution room by 2025 now stands at $102,000. This makes the TFSA a powerful tool for both short-term and long-term financial goals, as withdrawals remain tax-free.

RRSP Contribution Limit for 2025

The maximum RRSP contribution limit for 2025 has increased to $32,490, up from $31,560 in 2024. This amount is determined by taking the lesser of:

• 18% of your earned income from the previous year (2024), or

• The CRA’s annual contribution limit.

Unused contribution room from previous years continues to carry forward, giving investors more flexibility in managing their retirement savings.

How These Changes Affect Your Savings Strategy

With these updates, Canadians have even more opportunities to maximize their tax-advantaged savings:

✅ Use Your TFSA for Flexible, Tax-Free Growth – Ideal for emergency funds, major purchases, or long-term investments.

✅ Leverage RRSP Contributions for Immediate Tax Savings – Reduce your taxable income now and let your investments grow tax-deferred until retirement.

✅ Combine Both Accounts – Max out your RRSP contributions if you're in a high tax bracket and use the TFSA for additional savings without tax implications upon withdrawal.