RSP Basics and Why You Should Contribute Before the March 2 Deadline
The clock is ticking for Ontario residents who want to maximize their 2025 tax savings. The Registered Retirement Savings Plan (RSP) contribution deadline of March 2, 2026, is fast approaching, offering one final chance to reduce last year’s income taxes while setting up your future retirement security.
What’s the Deadline All About?
Any RSP contributions made between January 1 and March 2, 2026, can be claimed as deductions on your 2025 tax return. That means you can still retroactively lower the taxes you owe for last year — or potentially boost your refund — by contributing now.
Your available contribution room is the lesser of 18% of your 2025 earned income or $32,490, plus any unused room from prior years. You can check your exact room on your most recent CRA Notice of Assessment or online through your My CRA Account.
How RSP Contributions Cut Your Taxes
Every dollar you put into an RSP directly reduces your taxable income. Depending on your income bracket, that can translate to an immediate refund worth anywhere from 20% to 50% of your contribution.
For example:
If you’re in Ontario’s 43.41% combined federal–provincial tax bracket and contribute $10,000, you can expect a tax savings of roughly $4,341.
Even middle-income earners can benefit — a $5,000 contribution might return around $1,250 or more, depending on your bracket.
This makes RSPs one of the most efficient tools available for tax deferral and long-term wealth building.
Growth Without Tax Drag
Unlike regular investment accounts, RSPs allow your investments to grow tax-free until withdrawal. That means you can reinvest dividends, interest, and capital gains without losing a portion to annual taxes. Over time, this compounding advantage can add up to significantly more retirement income.
When you withdraw funds in retirement, you’ll pay tax at your future income rate, which is typically lower once you’re no longer earning full-time. In other words, you’re potentially paying less tax on the same money later.
Why It Pays to Act Now
Delaying contributions means missing out on both immediate tax benefits and extra months of compounding growth. Even a last-minute deposit can make a meaningful impact. Most major banks and financial institutions allow you to contribute electronically until midnight on March 2. You can do this easily through:
Your online banking or mobile app
A financial advisor or planner
Direct e-transfer to your registered RSP account
Whether you’re catching up on unused room or getting ahead for this year, now is the perfect time to review your contribution limit and make your move.
The Takeaway
RSPs aren’t just for retirement — they’re one of the smartest ways to optimize your tax bill today while planning for tomorrow. Use the upcoming deadline as motivation to take control of your savings strategy, lower your 2025 taxes, and keep more of your hard-earned money working for you.
Disclaimer:
The content on this website is provided for general informational purposes only and does not constitute legal or professional advice. Visitors are encouraged to seek specific legal guidance by contacting the lawyers at CRS Law Collective or their own legal counsel regarding any particular matter. CRS Law Collective does not guarantee the accuracy, completeness, or currency of any information on this website. The materials published here are current as of their original publication date and should not be relied upon as accurate, complete, or applicable to any specific situation.