Published by Beaver Ledger · Edited
A simple employment-income comparison for 2025 and 2026, every province and territory except Quebec. The example uses Ontario in 2025, and 2026 gives the same result.
The question
How much tax could an RRSP deduction save?
An RRSP deduction lowers the income your tax is worked out from, so each dollar saves roughly the combined federal and provincial rate on the slice of income it removes. Contributing and claiming the deduction are separate choices: you can contribute now and deduct in a later year.
Check your room first
Your RRSP deduction limit is on your latest notice of assessment and in CRA My Account. Subtract anything you've contributed since. A calculator's input box isn't permission to contribute, and a formula based on salary alone can't work out your room, because pension plans and unused contributions change it.
Example: a deduction within one bracket
Take an Ontario employee in 2025 earning $85,000, with a $5,000 RRSP deduction and nothing else changing. The whole $5,000 comes off income taxed at 20.5% federally and 9.15% in Ontario, so the saving is $5,000 × (20.5% + 9.15%) = $1,482.50. The same example in 2026 saves the same $1,482.50, because those two rates still apply to income between $80,000 and $85,000.
That isn't necessarily a $1,482.50 refund. It leaves out CPP, EI and personal credits, assumes you have the room, and assumes the tax taken off your pay doesn't change. Near a bracket line, part of the deduction saves at a different rate.
You pay the tax later
Money you take out of an RRSP is taxed as income in the year you withdraw it. So a deduction delays tax; how much it's worth depends on your income when you withdraw. The Home Buyers' Plan and Lifelong Learning Plan have their own rules, which this calculator doesn't cover.
Before you move money
Compare the deduction you plan to claim with your room and the cash you need. Borrowing to contribute just to get a refund has a cost this saving doesn't account for.
- Confirm your room and what you've already contributed.
- Pick a deduction you can actually claim.
- Compare your tax with and without it, then think about when you'll need the money.
Sources checked for this editorial revision on October 17, 2026. Educational content from Beaver Ledger; no professional review is claimed. Methods and limitations · Editorial practices and corrections.