Every year, Canadians face a deadline for making the year’s RRSP contributions.
Surprisingly, the deadline is not the end of the calendar year, but rather the first or second of March. There are several reasons for this. First, it usually takes some time to calculate your exact annual income after the calendar year ends, as it takes time to add up your tax breaks, deductions and other adjustments. Second, it’s common for employees to get year-end bonuses, making the end of the year a major change in a person’s tax situation. Third and finally, the Canadian government’s fiscal year is April 1 to March 31, so it’s not like the calendar year end is an especially important date from the government’s perspective anyway.
For all these reasons, Canadians have until the first or second day of March to make RRSP contributions for the previous year. For the 2026 calendar year, the deadline is March 1, 2027. So, if you still want to get some last-minute RRSP contributions into your account before the start of the year, you’ve still got time to do so. Here’s how I’d approach making last-minute RRSP contributions ahead of the March deadline.
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Commit to contributing a little money from each paycheque
If you have just a few weeks left to make RRSP contributions, you might feel tempted to take out an RRSP loan to get the money into the account. Indeed, many Canadian financial advisors recommend doing that. However, being that it’s only mid-November, and there are still three and a half months to get your contributions in, you might as well just get the money from sources you already have access to. There’s no need to do anything desperate with this much time remaining.
So, probably your best bet to get your 2026 RRSP contributions in by the 2027 deadline is to simply make larger deposits from each paycheque than you’d been making earlier in the year. If you can’t quite hit your contribution goal that way, then maybe take the funds from another savings account, if you have one. I wouldn’t do anything drastic just to hit your annual RRSP contribution goal – remember, if it comes down to it, there’s always next year.
The power of the RRSP
The power of the RRSP comes in two forms: taking a break from contributions, and tax-free compounding. There’s also the potential to withdraw at lower rates in retirement, though that’s not a guarantee (some people make large sums of pension income in retirement, more than they earned working).
The main benefit you get from RRSP contributions immediately is a tax break. An RRSP deposit counts as a tax deduction, an amount subtracted from your annual income. So let’s say you have a 30% marginal tax rate, you make a $20,000 RRSP contribution, and are eligible to make a contribution of that size (many Canadians are). If you do this, then you save $6,000 on your tax bill for the year in which you make the contribution (that “year” runs to March 1 of 2027).
You also enjoy extra compounding power when you invest in an RRSP.
Take Shopify Inc. (TSX: SHOP), which has risen 5,983% since its IPO. The company has grown its revenue and earnings by thousands of percentage points since going public. In total, its revenue has gone up 4,140% since its IPO date! Naturally, SHOP’s stock price has followed suit. If a person had had the foresight to buy $10,000 worth of SHOP in an RRSP and hold it to today, they’d have a $608,300 position! Of course, that would all become taxable when the person went to withdraw funds in retirement. But if, like most Canadians, their overall income was lower in retirement, the taxes they’d pay on it would be pretty low. So, making RRSP contributions and investing them wisely can pay off over the long run.
