What is the Total Contribution Limit for a TFSA ?

TFSAs (Tax-Free Savings Accounts) are a popular investment tool in Canada, allowing individuals to grow their savings tax-free. Understanding the total contribution limit for a TFSA is essential for maximizing its benefits and avoiding potential penalties.

This blog will delve into the details of TFSA contribution limits, how they work, and their advantages.

Understanding the TFSA

Introduced by the Canadian government in 2009, the TFSA is a flexible savings vehicle that allows Canadians to earn investment income free of tax. Unlike traditional savings accounts, TFSAs can hold various investment products, such as stocks, bonds, ETFs, and GICs. Contributions to a TFSA are made with after-tax dollars, meaning withdrawals are tax-free.

Annual Contribution Limits

The contribution limit for TFSAs varies each year, indexed to inflation and rounded to the nearest $500. As of 2022, the annual contribution limit is $6,000. This amount is set by the Canada Revenue Agency (CRA) and can change yearly.

Lifetime Contribution Limit

The lifetime contribution limit for a TFSA is the sum of all annual contribution limits since the account’s inception in 2009. For instance, if you were eligible to contribute to a TFSA since 2009 and had never made a contribution, by 2022, you could contribute up to $81,500. This cumulative limit includes any unused contribution room from previous years, which carries forward indefinitely.

Calculating Your Contribution Room

To calculate your available contribution room, consider the following:

  1. Annual Limit: Check the current year’s contribution limit.
  2. Previous Contributions: Total all contributions made in previous years.
  3. Withdrawals: Any amount withdrawn from your TFSA is added back to your contribution room at the beginning of the following year.

For example, if you contributed $5,000 in 2021 and withdrew $2,000, your 2022 contribution limit would include the $6,000 annual limit plus the $2,000 from the previous year’s withdrawal, totaling $8,000.


Penalties for Over-Contribution

Contributing more than your available limit can result in penalties. The CRA imposes a 1% monthly tax on the excess amount until it is withdrawn. It’s crucial to track your contributions carefully, especially if you hold multiple TFSAs, to avoid these penalties.

Advantages of a TFSA

Flexibility and Tax-Free Growth

One of the most significant advantages of a TFSA is the flexibility it offers. You can withdraw funds at any time without incurring taxes, making it ideal for both short-term savings and long-term investment goals. Since the contributions are made with after-tax dollars, all investment growth, whether it’s interest, dividends, or capital gains, is tax-free.

No Impact on Government Benefits

Withdrawals from a TFSA do not affect eligibility for federal income-tested benefits and credits, such as Old Age Security (OAS) or the Guaranteed Income Supplement (GIS). This makes TFSAs particularly advantageous for retirees who rely on these benefits.

No Age Limit for Contributions

Unlike Registered Retirement Savings Plans (RRSPs), which have a contribution age limit of 71, there is no age limit for contributing to a TFSA. As long as you are 18 or older and have a valid Social Insurance Number (SIN), you can contribute to a TFSA.


The TFSA is a powerful savings tool that offers Canadians the opportunity to grow their investments tax-free. Understanding the total contribution limit and how it accumulates over time is crucial for maximizing the benefits of a TFSA. Always keep track of your contributions and withdrawals to avoid penalties and make the most of this flexible and advantageous savings account.

For more detailed information and advice on TFSAs, you can visit the Super Visa Insurance Monthly website.