Obtain your previous year’s Earned Income from your last Income Tax Return and multiply this amount by 18%. This will give you your preliminary Contribution Limit amount. From this amount you then deduct the Pension Adjustment (PA) amount (reported in Box 52 on your T4 Income Tax slip), if any, and the Past Service Pension Adjustment (PSPA) amount (reported in Box 2 on a T215- PSPA slip), if any. The resulting number is your allowable RRSP contribution limit.
a) 18% of the previous year’s Earned Income (T4 slip) $ 4,500
b) Less the Pension Adjustment (Box 52 on the T4) $ 2,300
c) Less the PSPA (Box 2 on the T215) $ 0
d) Current Contribution Limit $ 2,200
Note: The easiest way to determine your current allowable RRSP contribution limit is to review your Canada Revenue Agency’s most recent Income Tax Assessment Notice. Located at the bottom of this notice is the calculation of your allowable contribution limit for the current tax year and a note of any contributions made but not deducted from your taxable income from previous years.