If you are new to Canada, you will probably hear about the FHSA, the RRSP and the TFSA early on. This guide gives a short overview of the three accounts, explains why RRSP room can be small in your first year and shows where to find your own figures. It is general information, not tax or investment advice.
The three accounts at a glance
- FHSA (First Home Savings Account): for saving toward a first home. Contributions are deducted from taxable income. The limit is $8,000 a year and $40,000 over a lifetime. A withdrawal for a qualifying first home purchase is not taxed.
- RRSP (Registered Retirement Savings Plan): contributions are deducted from taxable income. The 2026 limit is 18% of prior-year earned income, up to $33,810. A withdrawal is taxed as income.
- TFSA (Tax-Free Savings Account): contributions are not deducted, so there is no refund. The 2026 limit is $7,000. A withdrawal is not taxed.
Why first-year RRSP room can be small
The RRSP limit is based on your earned income from the previous year, not this year. If you had no earned income the year before, 18% of that amount is zero, so a high salary this year does not by itself create room this year. For example, 18% of $50,000 is $9,000, and 18% of $100,000 is $18,000.
This is why the calculator on this site has a separate, optional field for previous-year income. If you leave it blank, the calculator uses this year’s income for the limit check, which may not match your situation in your first years here. Entering the previous-year figure gives a more useful notice. Either way the notice only compares your entry with the public limit.
Where to find your own figures
Your Notice of Assessment (NOA) is the document the CRA sends after your tax return is assessed. It is available in CRA My Account, and it is the place to check your RRSP room, including unused room. This means your first NOA may arrive only after you have filed your first return in Canada.
How the refund estimate works
For an FHSA or RRSP contribution, the estimate on this site is the tax before the contribution minus the tax after it, using 2026 federal and provincial rates. For example, in British Columbia with $85,000 of income, an $8,000 contribution gives an estimate of about $2,256.00. Your province matters, so the calculator asks for it first. Quebec has its own provincial return and a federal abatement, which the estimate includes.
The estimate treats the income you enter as taxable income for the full year. It leaves out other credits and deductions, so your own result can differ.
Residency rules
Your residency status for income tax purposes affects these accounts:
- TFSA: as a new resident you can open one from the day you become a resident, if you are 18 or older and have a valid Social Insurance Number. Your room starts to build in your year of residency.
- FHSA: you must be a resident of Canada when you open it. The first-time home buyer test also counts a home outside Canada that would be a qualifying home if it were in Canada.
- RRSP: room depends on your earned income from the previous year, as explained above.
The CRA TFSA page and CRA FHSA page have the full conditions. Your situation may involve income from outside Canada or a mid-year arrival, and a tax professional can review how the rules apply to you.