This calculator is based on a single taxpayer. It does not take into account any personal amounts, such as the spousal amount, disability amount, or age amount. In most cases, such personal amounts will have no effect on the taxpayer's savings by making an RRSP contribution.
Tax Year
This calculator defaults to the current calendar year or, if tax rates are available, to the following calendar year. Remember that rates are subject to change until the end of the year.
Select the taxpayer's province of residence as of the end of the taxation year. This is used to determine provincial tax rates. Note that because Quebec determines taxable income differently from the other provinces, this calculator any variances in the taxable income for Quebec purposes are ignored.
Enter the proposed RRSP contribution. This calculator assumes that the taxpayer has sufficient RRSP contribution room to deduct the full amount contributed.
This section shows the federal and provincial taxes payable with no RRSP contribution and with the proposed RRSP contribution. These amounts may be overstated if the taxpayer is eligible for additional personal amounts.
This line shows the difference between the taxes payable with no RRSP contribution and the contribution entered.
Although the individual amounts may be overstated if the taxpayer is eligible for additional personal amounts, the difference - i.e. the savings by making the contribution will still be accurate.
This line shows the tax savings as a percentage of the RRSP contribution. This represents an immediate return on investment of the RRSP funds before any investment returns earned within the RRSP.
This section allows you to set up the details of a proposed RRSP loan to make the contribution. While the interest paid on an RRSP loan are not tax deductible, the immediate tax savings from making the contribution may be sufficient to warrant making the loan if funds are not otherwise available to contribute.
Amount borrowed - this field default to the RRSP contribution amount but if less is borrowed, the amount may be overridden
Interest rate - this field defaults to 3% - enter the appropriate rate for the proposed loan
Repayment period - this field defaults to 1 year. Override if the loan repayment will be over a different period of time.
Monthly payment - this amount will be calculated based on the amount borrowed, interest rate and repayment period
This section shows the cost of the loan and the resulting growth within the RRSP.
Using the refund to pay down the loan - by default the calculator assumes that the tax savings due to the RRSP contribution will be used to pay down the loan after three months. Override the pay-down amount or period if the defaults are not appropriate.
RRSP expected rate of return - this field defaults to 4%. Enter your expected rate of return within the RRSP if different.
Cost of borrowing - this field calculates the interest payable on the loan based on the details of the loan taking into account the early paydown using the anticipated income tax refund as a result of the RRSP contribution.
RRSP value - this is the expected value of the RRSP contribution at the time the RRSP loan is repaid, based on the expected rate of return within the RRSP assuming monthly compounding.
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Removing Overrides - If you type into a overridable field (), the field will turn red and the field value will no longer be calculated even if additional changes are made to other input fields. If you wish to remove your override and have the field calculated again, delete the entire contents of the field.
