How TFSA contribution room works
A Tax-Free Savings Account (TFSA) lets Canadians aged 18 and older save and invest without paying tax on interest, dividends or capital gains — and withdrawals are tax-free too. Your contribution room is made up of three parts:
- The annual limit for every year since 2009 in which you were at least 18 and a resident of Canada. The limit for 2026 is $7,000.
- Unused room from previous years, which carries forward indefinitely.
- Withdrawals made in earlier years, which are added back to your room on January 1 of the following year.
Someone who was 18 or older and living in Canada in 2009 and has never contributed has $109,000 of room in 2026. You start accumulating room in the year you turn 18, even if you don't open an account until later.
Avoid over-contributing
If you put in more than your available room, the CRA charges a tax of 1% per month on the highest excess amount in each month until it is withdrawn. The most common mistake is re-contributing money withdrawn earlier in the same year: that withdrawal only restores room next January. Your exact room is shown in your CRA My Account, but it may not include transactions from the current year, so keep your own records too.
TFSA vs. RRSP
Both accounts shelter investment growth, but they work in opposite directions. RRSP contributions are tax-deductible now and withdrawals are taxed later; TFSA contributions get no deduction but come out tax-free. An RRSP usually wins if you expect a lower tax rate in retirement, while a TFSA is more flexible for medium-term goals and for people in lower tax brackets. Many Canadians use both — see our RRSP calculator and FHSA calculator for a first home.
What can you hold in a TFSA?
Despite the name, a TFSA is not just a savings account. It can hold cash, GICs, bonds, mutual funds, ETFs and individual stocks. Because gains are never taxed, investments with higher long-term growth potential benefit most from the TFSA shelter. The growth projection above assumes a steady yearly return and contributions made at the end of each year; actual returns will vary.
Worked example
Someone born in 1990 who has lived in Canada all their life started earning TFSA room in 2009, the year the TFSA began (they turned 19 that year). If they have contributed $40,000 in total and withdrew $5,000 in a previous year, their available room in 2026 is $109,000 minus $40,000 plus $5,000. A person born in 2007 only starts earning room in 2025, the year they turn 18, so their room in 2026 is the sum of the 2025 and 2026 limits.
Frequently asked questions
What is the TFSA limit for 2026?
When do I start getting TFSA room?
Does withdrawing money give me my room back?
Do non-residents get TFSA room?
Sources & methodology
This calculator was last reviewed on November 2, 2026. Figures are based on the following official and primary sources:
- Canada Revenue Agency – TFSA contribution room
- Canada Revenue Agency – TFSA, RRSP and FHSA contribution limits
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