2

My employer gives a matching contribution for my RRSP.

So let us say if I contribute $5000, the employer contributes $2000 (free money.)

Does this $2000 contributed by my employer also eat up my RRSP contribution room?

i.e if I had only $6000 contribution room, would I be over the limit?

So on the excess contribution ($5000 + $2000 - $6000) = $1000, how might I be penalized?

2

Yes it does. The employer contribution is both a Taxable Benefit and also counts in the RRSP limit for that year. The Tax Receipt for RRSP Contributions you get from the financial institution where you have your RRSP will show the total amount deposited in your account, regardless of the source, employee or employer.

Excess contributions over 2000$ are usually taxed 1% per month : http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/rrsp-reer/cntrbtng/xcss-eng.html

  • So if the excess is within 2000, there is no tax? Also, the receipt I got from my employer( who also happens to be the financial institution) only shows my contribution, not employer's contribution – Victor123 Apr 2 '15 at 2:34
  • I suggest clarifying with the department that issued the receipt. How much do you see was deposited in your RRSP account? If it is 7000$, the receipt should reflect that. – Etienne D. Apr 2 '15 at 2:53

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