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TFSA vs RRSP Calculator

Put the same pre-tax income into a TFSA or an RRSP and see what you can spend after tax in the end. The answer mostly depends on your tax rate today compared with your rate in retirement.

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Not sure of your rate? Check your marginal rate with the Canada take-home pay calculator.

Where the numbers come from

Good to know

This is an estimate for general information. It is not tax, legal or financial advice. Your payslip can differ because of tax codes, credits, local taxes, benefits and your employer's rules. Check official guidance or ask a qualified adviser.

What it does

  • Compares the two accounts using the same pre-tax income
  • Your tax rate now and your expected rate in retirement
  • Growth over any number of years, with a chart
  • Shows the RRSP tax refund and the tax paid on withdrawal
  • Flags the 2026 TFSA and RRSP contribution limits

How to use it

  1. Enter the pre-tax amount you are deciding how to save.
  2. Enter your tax rate today. Our Canada take-home calculator shows your marginal rate.
  3. Enter the tax rate you expect in retirement, then the years and yearly growth.
  4. Read which account leaves more, and by how much.

How do a TFSA and an RRSP compare?

With an RRSP, you put in pre-tax money, you get a tax refund now, and the withdrawals are taxed later as income. With a TFSA, you put in money that has already been taxed, and the growth and withdrawals are tax-free. If your tax rate in retirement equals your rate today, the two accounts end up exactly even. That is why the comparison comes down to the two rates.

If you expect a lower tax rate in retirement, the RRSP tends to win, because you take the deduction at a high rate and pay tax at a lower one. If you expect a higher rate, or you are early in your career on a low income, the TFSA tends to win. This calculator treats the RRSP refund as part of the same pot, so it compares the accounts fairly. It does not include things like OAS clawbacks, spousal plans or provincial credits, which can change the answer.

Example

Take $10,000 of pre-tax income, a 30% rate today, 20% in retirement and 6% growth over 25 years. The TFSA gets $7,000 after tax, which grows to about $30,000. The RRSP gets the full $10,000, which grows to about $42,900 and is worth about $34,300 after 20% tax. The RRSP comes out ahead by roughly $4,300.

Questions people ask

Which is better, TFSA or RRSP?
Neither always wins. If your tax rate will be lower in retirement, the RRSP usually comes out ahead. If it will be the same or higher, the TFSA does as well or better, and it is more flexible.
What are the 2026 limits?
The TFSA annual limit is $7,000, and the RRSP limit is 18% of last year's earned income up to $33,810. Your own room is shown in your CRA My Account.
Does the RRSP refund matter?
Yes. If you invest the refund, the RRSP gains an edge when your tax rate is high today. This calculator handles that by comparing the same pre-tax income in both accounts.
Can I use both?
Yes, and many people do. A common plan is to use the RRSP at higher income and the TFSA at lower income, or to fill whichever fits your goals.
Is this financial advice?
No. It is a general guide using simple assumptions. Check CRA guidance or speak to a qualified adviser for your own situation.

Disclaimer

This tool is for general information only. It is not financial, tax, investment or legal advice, and results are estimates that may differ from your bank, lender or tax authority. Rates, limits and tax rules change. Bank and brand names are used only to describe what the tool does; they belong to their owners and we are not affiliated with them. Check the figures with a qualified professional or your provider before you decide. You use this tool at your own risk, and TheFreeTool is not liable for any loss that follows. Read the full disclaimer

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