General information only — not financial advice for your situation.
This is a learning tool. Always check CRA My Account records and talk to a qualified professional for your own numbers.
Plain English
Putting more money into your TFSA or RRSP than you're allowed. CRA charges a 1% penalty per month on the excess until you fix it.
Technical definition
An over-contribution occurs when contributions exceed the available room in a registered account. For TFSAs, any excess amount is subject to a 1% per-month penalty tax with no grace buffer. For RRSPs, there is a lifetime $2,000 buffer before the 1% monthly penalty applies. The penalty continues until the excess is withdrawn or new room absorbs it.
Examples
- • You have $5,000 of TFSA room but contribute $8,000. The $3,000 excess is penalized at 1%/month = $30/month until withdrawn.
- • You over-contribute $4,500 to your RRSP. The first $2,000 is penalty-free, but the remaining $2,500 is taxed at 1%/month ($25/month).
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About this site
Every number on this site is sourced from CRA publications, the Income Tax Act, or provincial fiscal releases. We show the math, cite the sources, and never tell you what to do with your money.