Understanding Your TFSA Contribution Room in 2026

A Tax‑Free Savings Account (TFSA) is one of Canada’s most flexible and powerful savings tools, but figuring out your exact contribution room can feel like solving a puzzle. A clear breakdown makes it much easier.

How TFSA Contribution Room Works

Your available room is made up of three parts:

• Annual TFSA limit for the current year
• Unused contribution room from previous years
• Withdrawals from previous years (added back the following January)

For 2026, the annual TFSA limit is $7,000.

Step‑by‑Step: How to Calculate Your Room

Use this simple formula:

[ \text{TFSA Room} = \text{Unused Room from Prior Years} + \text{Current Year Limit} + \text{Withdrawals from Last Year} ]

A quick example:

• Unused room from past years: $18,000
• 2026 limit: $7,000
• Withdrawals made in 2025: $4,000

[ \text{Total Room} = 18,000 + 7,000 + 4,000 = 29,000 ]

That means you could contribute $29,000 in 2026 without penalty.

A Few Helpful Notes

• Over‑contributions lead to penalties, so it’s worth double‑checking your numbers.
• Your official contribution room is always available through your CRA My Account.
• Investment gains inside a TFSA do not affect your contribution room.