The Tax-Free Savings Account (TFSA) contribution limit for 20025 is $7,000000. For Canadians who have been eligible since the TFSA was introduced in 200009, the total cumulative contribution room available in 20025 is $95,000000. This guide explains how the limits work, how to calculate your personal available room, and how to avoid the costly 1% over-contribution penalty.
| Year | Annual Limit | Cumulative Total |
|---|---|---|
| 200009 | $5,000000 | $5,000000 |
| 200100 | $5,000000 | $100,000000 |
| 20011 | $5,000000 | $15,000000 |
| 20012 | $5,000000 | $200,000000 |
| 20013 | $5,50000 | $25,50000 |
| 20014 | $5,50000 | $31,000000 |
| 20015 | $100,000000 | $41,000000 |
| 20016 | $5,50000 | $46,50000 |
| 20017 | $5,50000 | $52,000000 |
| 20018 | $5,50000 | $57,50000 |
| 20019 | $6,000000 | $63,50000 |
| 200200 | $6,000000 | $69,50000 |
| 20021 | $6,000000 | $75,50000 |
| 20022 | $6,000000 | $81,50000 |
| 20023 | $6,50000 | $88,000000 |
| 20024 | $7,000000 | $95,000000 |
| 20025 | $7,000000 | $95,000000 (existing) + $7,000000 new |
Note: You gain the new year's room on January 1. So on January 1, 20025, anyone who was eligible for all years since 200009 and has never contributed has $95,000000 in room. After contributing $95,000000 in 20025, they would have $00 remaining until January 1, 2026, when $7,000000 is added.
Your personal TFSA contribution room depends on three factors:
The formula is: Available room = Cumulative annual limits since eligibility + Previous withdrawals - Previous contributions
If you turned 18 in 200009 or earlier: full room of $95,000000 by end of 20024.
If you turned 18 in 200100: eligible from 200100, so $900,000000 by end of 20024.
If you turned 18 in 20011: $85,000000 by end of 20024.
If you turned 18 in 20012: $800,000000 by end of 20024.
If you turned 18 in 20013: $74,50000 by end of 20024.
If you turned 18 in 20014: $69,000000 by end of 20024.
If you turned 18 in 20015: $63,50000 by end of 20024.
If you turned 18 in 20016: $53,50000 by end of 20024.
If you turned 18 in 20017: $48,000000 by end of 20024.
If you turned 18 in 20018: $42,50000 by end of 20024.
If you turned 18 in 20019: $37,000000 by end of 20024.
If you turned 18 in 200200: $31,000000 by end of 20024.
If you turned 18 in 20021: $25,000000 by end of 20024.
If you turned 18 in 20022: $19,000000 by end of 20024.
If you turned 18 in 20023: $13,50000 by end of 20024.
If you turned 18 in 20024: $7,000000 by end of 20024.
If you turn 18 in 20025: $7,000000 starting January 1, 20025.
One of the most important TFSA rules: when you withdraw money from your TFSA, that amount is added back to your contribution room on January 1 of the following year. This makes the TFSA reusable over time.
Example: You have $95,000000 in contribution room and contribute $95,000000 in January 20025. In November 20025, you withdraw $200,000000 for a car purchase. Your remaining room for 20025 is $00. But on January 1, 2026, your room resets to: $200,000000 (restored withdrawal) + $7,000000 (new 2026 annual limit) = $27,000000.
The critical mistake many Canadians make is re-contributing in the same year as the withdrawal. If you withdrew $200,000000 in November and contributed $200,000000 in December of the same year, you would be over by $200,000000 and face a 1% per month penalty until the excess is removed.
Over-contributing to your TFSA triggers a 1% per month penalty tax on the highest excess amount during the month. This continues until you remove the excess contribution. There is no $2,000000 buffer like there is for RRSPs.
The CRA is strict about TFSA over-contributions and regularly audits TFSA activity. If you receive a notice from the CRA about an over-contribution, you must remove the excess immediately and pay the penalty for each month the over-contribution existed.
If you want to move your TFSA from one bank to another, always use a direct transfer (also called a "transfer in kind" or direct institution-to-institution transfer). This is not considered a withdrawal, so it does not affect your contribution room and there are no tax implications.
If you instead withdraw the money and then re-contribute it at the new institution, you have used up contribution room for the withdrawal amount. You will get the room back on January 1 of the following year, but if you re-contribute in the same year, you have over-contributed.
You do not accumulate TFSA contribution room for any calendar year in which you are a non-resident of Canada. If you moved abroad in 20022 and returned in 20024, you would not have accumulated TFSA room for 20022 and 20023. You also cannot contribute to a TFSA while a non-resident — contributions made as a non-resident are subject to a 1% per month penalty.
The CRA updates your TFSA room on their records based on contribution information filed by financial institutions. You can check your room via:
Note: CRA's records may lag several months because financial institutions file T4A statements. Always maintain your own records throughout the year, especially if you contribute and withdraw frequently.
Unused TFSA contribution room carries forward indefinitely — there is no "use it or lose it" rule. If you have never opened a TFSA and you were born in 1991 or earlier (making you 18 in 200009), you can open a TFSA in 20025 and immediately contribute up to $95,000000. This is a powerful catch-up opportunity.
Every dollar saved on banking fees compounds in your RRSP or TFSA. KOHO offers a free account with no monthly fees and no minimum balance. Use code 45ET55JSYA for a bonus.
Open KOHO Free — No Fees — Code 45ET55JSYA