Each year, CRA calculates your RRSP contribution room based on your earned income from the previous year. The general rule is 18% of your previous year's earned income, up to an annual maximum set by CRA. If you do not use all your RRSP room in a year, the unused amount carries forward indefinitely. For the 2026 tax year, the RRSP dollar limit is $33,810. Earned income for RRSP purposes includes employment income, self-employment income, rental income, and certain other types. It does not include investment income or pension income. You are allowed a $2,000 lifetime over-contribution buffer before penalties apply. Beyond that buffer, CRA charges a 1% per month penalty tax on excess contributions.