The RRSP-versus-TFSA question is really one question: is your tax rate higher now, or when you withdraw? Enter your province and income below and we will compute your marginal tax rates from the 2026 federal and provincial tax brackets, then see which account wins.
Compare RRSP vs TFSA
Marginal tax rates are computed from the 2026 federal and provincial tax brackets. General information only — not financial advice. Employment/other income only; only the basic personal amount credit is applied (no CPP/EI, age, pension or other credits); Ontario Health Premium included for Ontario; 2026 figures, verified November 8, 2026. Excludes BC’s tax reduction credit, which phases out by ~$45,000 of income.
The whole decision is the rate comparison
An RRSP gives you a tax deduction now and taxes the withdrawal later; a TFSA gives you no deduction but tax-free withdrawals. If your marginal rate is higher today than in retirement, the RRSP usually wins. If it will be higher later, the TFSA usually wins. If the rates are the same, the two accounts tie (with the refund reinvested) — so the real question is always about your rates, not about which account is “better” in the abstract.
The TFSA is also the flexible one: withdrawals are tax-free, do not count as income, and the room comes back the following year, so it can double as an emergency fund. RRSP withdrawals are taxed as income, count toward benefit clawbacks, and the room is gone for good.
RRSP room has limits: you can contribute 18% of your earned income each year, up to the annual maximum, and unused room carries forward. Spousal RRSPs have attribution rules — a withdrawal from a spousal RRSP can be taxed back to the contributing spouse if it is made within three years of a contribution.
Estimates only, and not tax advice. This calculator assumes a constant annual return and constant tax rates, and ignores fees, pension adjustments and benefit clawbacks. Use your actual marginal tax rate — not your average rate — and check your RRSP room with the CRA before contributing.
Frequently asked questions
Should I contribute to an RRSP or a TFSA first?
Compare your marginal tax rate today with the rate you expect in retirement. If your rate today is higher, the RRSP usually wins — you deduct at the high rate and withdraw at the lower one. If your rate will be higher in retirement, the TFSA usually wins. If the rates are the same, the two tie, with the refund reinvested.
What happens to the RRSP tax refund?
An RRSP contribution is pre-tax money, so the refund is part of the deal, not a bonus. If you spend it, the RRSP’s advantage shrinks. Reinvest the refund — or gross up your contribution — to get the full benefit.
Can I withdraw from a TFSA without penalty?
Yes. TFSA withdrawals are tax-free, do not count as income, and the room comes back the following January 1. That makes the TFSA the better home for money you might need before retirement.
How much RRSP room do I have?
You earn room equal to 18% of your earned income each year, up to the annual maximum ($33,810 for 2026), and unused room carries forward. Check your exact room on your CRA notice of assessment before contributing.
What is the RRSP deadline for the 2026 tax year?
March 1, 2027. Contributions made in the first 60 days of 2027 can go on either your 2026 or your 2027 return.
Don’t know your marginal rate? Find it with the Marginal Tax Rate Calculator — or estimate your full tax bill with the Canadian Income Tax Calculator.
Before you contribute, check how much room you actually have with the TFSA Room Calculator.
Related tools
See how the money could grow with the Compound Interest Calculator.