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TFSA Calculator Canada
Project your Tax-Free Savings Account growth with the 2026 rules: a $7,000 annual limit, tax-sheltered compounding, and tax-free withdrawals.
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Maximum $7,000 per year for 2026.
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Planning estimate only. Assumes annual contributions and steady growth, before fees. The 2026 TFSA annual limit is $7,000; confirm your personal room in CRA My Account before contributing.
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Start investing with WealthsimpleWhat is a TFSA?
A Tax-Free Savings Account (TFSA) lets Canadians 18 and older earn investment income — interest, dividends and capital gains — completely tax-free. Contributions are not deductible, but withdrawals are never taxed and don’t affect benefits. The 2026 annual limit is $7,000, and unused room carries forward indefinitely.
How the TFSA works in 2026
The Tax-Free Savings Account is one of the most powerful tools available to Canadian savers. Any Canadian resident aged 18 or older with a valid Social Insurance Number can open one. Inside the account, interest, dividends and capital gains grow completely sheltered from tax — and when you withdraw, the money is tax-free too. The trade-off: unlike RRSP contributions, TFSA contributions are not tax-deductible. The TFSA rewards you on the way out, not the way in.
TFSA contribution limits for 2026
| Rule | Limit |
|---|---|
| Annual contribution limit (2026) | $7,000 |
| Maximum lifetime room | $109,000 — if you were 18+ and a Canadian resident every year since 2009 and have never contributed |
| Unused room | Carries forward indefinitely |
Your personal room depends on your age and residency history — if you turned 18 after 2009 or spent years living abroad, your room is lower. Check your exact limit in CRA My Account before contributing, because the CRA aggregates contributions across every institution you use.
Withdrawals: your room comes back next year
You can withdraw any amount from your TFSA at any time, tax-free, for any reason. The withdrawn amount is added back to your contribution room on January 1 of the following calendar year — not immediately. Recontributing in the same year is the most common way Canadians accidentally over-contribute.
The 1%-per-month over-contribution penalty
Contribute even one dollar over your limit and the CRA charges 1% per month on the excess for every month it remains in the account. The penalty keeps running until you remove the excess. Because withdrawn room is restored only the next calendar year, the safest approach is to confirm your available room in CRA My Account and keep a simple running total of what you have contributed this year.
TFSA vs RRSP: which should you max first?
Rough rule of thumb: if your income is modest now and you expect it to rise, the TFSA usually wins — you pay tax at today’s lower rate and withdraw tax-free later. In a high tax bracket today with lower income expected in retirement, the RRSP’s upfront deduction usually wins. Many Canadians fund both.
The power of compounding: contributing the full $7,000 each year for 10 years at 6% growth turns $70,000 of contributions into roughly $92,000 — the rest is tax-free compounding.
Frequently asked questions
What is the TFSA contribution limit for 2026?
The TFSA annual contribution limit for 2026 is $7,000. The limit is indexed to inflation and moves in $500 increments; any unused room from previous years carries forward indefinitely.
What is the maximum lifetime TFSA contribution room?
The lifetime maximum is $109,000 if you were at least 18 and a Canadian resident in every year since the program began in 2009 and have never contributed. If you turned 18 after 2009 or lived abroad, your room is lower.
If I withdraw from my TFSA, when can I recontribute?
The amount you withdraw is added back to your contribution room on January 1 of the next calendar year — not immediately. Recontributing in the same year is the most common cause of accidental over-contributions.
What happens if I over-contribute to my TFSA?
The CRA charges a 1% per month tax on the excess amount for every month it remains in the account. Remove the excess as soon as possible and confirm your available room in CRA My Account.
Are TFSA withdrawals taxed in Canada?
No. Investment growth inside a TFSA — interest, dividends and capital gains — is tax-sheltered, and withdrawals are completely tax-free and do not affect income-tested benefits.
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