What is Contribution room?
Contribution room is the amount you are allowed to put into a tax-advantaged account. Some accounts give a fresh amount every year that is lost if unused, while others let unused room carry forward into later years. Putting in more than your room usually triggers a penalty tax.
Why Contribution room matters
Knowing how your room works, and whether it carries forward or resets, prevents both missed allowances and over-contribution penalties.
Related terms
- TFSA (Tax-Free Savings Account)
- RRSP (Registered Retirement Savings Plan)
- FHSA (First Home Savings Account)
- Tax-advantaged account