Your annual contribution room depends on your age and when you opened your account

The amount you can put into a Tax-Free Savings Account (TFSA) each year is set by the Canada Revenue Agency and changes based on inflation. For 2024, the annual limit is $7,000. For 2023 it was $6,500. These limits explore to Canadian residents aged 18 and over.

Your contribution room is personal to you — it does not carry over to a spouse or partner, and it does not reset on January 1st each year in the way a regular savings account might. Instead, unused room accumulates. If you did not contribute the full amount in 2023, that unused $6,500 stays available to you in 2024, on top of the new $7,000 limit.

The CRA publishes the annual limit each November for the following year. If you are unsure what your personal room is — how much you have contributed so far and how much remains — you can check your CRA My Account online or call the CRA directly at 1-800-959-5525.

Key Takeaways

  • The 2024 annual contribution limit is $7,000; this amount changes yearly based on inflation and is rounded to the nearest $500.
  • Unused contribution room does not disappear — it accumulates year to year, so you can catch up if you did not contribute in previous years.
  • You can check your exact remaining room through CRA My Account or by calling the CRA.
  • Contributions made by a spouse or partner do not count toward your room; each person has their own separate limit.
  • Withdrawals from your TFSA free up contribution room again, but only starting January 1st of the following year.

How contribution room accumulates and carries forward

The TFSA was introduced in 2009 with an initial limit of $5,000 per year. That limit increased to $5,500 in 2013, then to $10,000 in 2015, and back down to $6,000 in 2016. Since 2018, the limit has been indexed to inflation and rounded to the nearest $500. This history matters because your total room includes every year you were may be able to access, even if you did not contribute.

If you opened a TFSA in 2009 and have never contributed anything, you have accumulated room from 2009 through 2024. That room is yours to use whenever you choose. You do not have to use it in the year it becomes available. This is different from an RRSP, where unused room also carries forward but is tracked differently on your tax return.

When you withdraw money from your TFSA, that amount becomes available again — but not until January 1st of the next calendar year. If you withdraw $3,000 in June, you cannot recontribute that $3,000 until January 1st. This prevents people from using the account as a short-term trading vehicle and then when ready refilling it.

What happens if you contribute more than your limit

Overcontributing to a TFSA triggers a penalty. The CRA charges 1% per month on the excess amount, calculated from the month the excess occurred until the month you withdraw it. If you accidentally put in $500 too much and leave it there for six months before correcting it, you owe $30 in penalties (1% × 6 months × $500).

The penalty is separate from the contribution itself — you still have to withdraw the excess to stop the penalty from growing. Once you withdraw it, the penalty stops accruing, but you do not get the penalty amount back. The CRA will notify you if they detect an overcontribution through your tax return or account activity, but it is your responsibility to monitor your own room.

Overcontribution usually happens by accident: a spouse contributes thinking it is their own account, or someone forgets they already made a contribution earlier in the year. If you are unsure whether you have room, check your CRA My Account before depositing money.

Spousal TFSAs and contribution room

A spousal TFSA is a separate account held in your spouse's name, but funded with your money. It does not give you extra contribution room. If you have $7,000 of room and your spouse has $7,000 of room, you can each contribute $7,000 to your own accounts, or you can contribute some of your $7,000 to a spousal account in their name. Either way, your total contribution is limited to your $7,000.

A spousal TFSA is useful for income splitting in retirement — money grows tax-free in both accounts, and withdrawals from the spousal account are taxed in your spouse's hands, not yours. But it does not increase the total amount your household can shelter from tax.

Tracking your room across multiple institutions

You can open a TFSA at more than one bank or investment firm. Your contribution room is shared across all of them. If you have a TFSA at Bank A with $3,000 in it and a TFSA at Bank B with $2,000 in it, you have used $5,000 of your annual room, regardless of which institution holds the money.

This is where overcontribution happens most often. Each institution only knows about the account they hold — they do not see your balance at other banks. You have to track the total yourself. The safest approach is to keep all your TFSA accounts at one institution, or to check your CRA My Account before making any contribution.

If you are moving money between institutions, remember that a transfer between your own accounts does not use contribution room — only new deposits do. A transfer is just moving existing TFSA money from one bank to another.

How inflation adjusts the annual limit

The TFSA limit is indexed to inflation each year and rounded to the nearest $500. This means the limit only changes when inflation pushes it up or down by at least $250. In years when inflation is low, the limit stays the same as the previous year. The CRA announces the new limit each November in the Canada Revenue Agency's annual indexation notice.

The rounding to the nearest $500 is important: if inflation would push the limit to $6,750, it rounds down to $6,500. If it would push it to $7,250, it rounds up to $7,500. This means the limit can stay flat for several years, then jump by $500 all at once.

Frequently Asked Questions

Can I contribute more than the annual limit if I have unused room from previous years?

Yes. If you have accumulated $20,000 of unused room over several years, you can contribute all $20,000 in a single year if you want to. There is no annual cap on how much of your accumulated room you can use — only on how much new room you gain each year.

What if I withdraw money and then want to put it back in the same year?

You cannot recontribute a withdrawal in the same calendar year. If you withdraw $5,000 in March, that $5,000 becomes available again on January 1st of the next year. Attempting to recontribute it in 2024 will trigger an overcontribution penalty.

Does my TFSA contribution room change if I move to another country?

You stop earning new contribution room once you are no longer a Canadian resident. Any room you accumulated before leaving remains yours, and you can still withdraw from your TFSA without penalty. But you cannot make new contributions once you lose Canadian residency.

How do I know my exact contribution room right now?

Log into CRA My Account online with your Social Insurance Number, or call the CRA at 1-800-959-5525. Both will show your total room accumulated since 2009, how much you have used, and how much remains available.