Contributions to a PRPP
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Contributions to a PRPP
Similar to RRSPs, the maximum amount that you and your employer can both contribute to a PRPP in a given tax year without tax implications is determined by your RRSP deduction limit that appears on your latest notice of assessment or notice of reassessment, or on a Form T1028, Your RRSP, HBP, LLP, or FHSA information for 2024. You can also find out your 2024 RRSP deduction limit by:
- calling 1-800-959-8281
- going to My Account for Individuals
- calling the Tax Information Phone Service (TIPS) at 1-800-267-6999
Any PRPP contributions you make that are not deducted on your income tax and benefit return are referred to as unused PRPP contributions.
It is important for you to keep track of your RRSP, PRPP and SPP contributions.
Employer PRPP contributions, combined with your PRPP, SPP and RRSP contributions, as well as contributions to your spouse’s or common-law partner’s RRSP or SPP that are above your RRSP deduction limit, may be considered excess contributions. Combined contributions that are more than your RRSP deduction limit may be subject to a tax of 1% per month for every month they are left in the account. If you withdraw the unused contributions from your PRPP, you can claim an offsetting deduction.
For more information, refer to What to do with unused RRSP, PRPP or SPP contributions.
Note
Unlike RRSPs and SPPs, you cannot contribute to your spouse’s or common-law partner’s PRPP.
Member contributions
You can make voluntary contributions to your PRPP between January 1 in a given year and 60 days into the following year, up until the end of the year in which you turn 71.
You can deduct your contributions on your income tax and benefit return, but your deduction must not be more than the difference between your RRSP deduction limit and the employer’s contributions to your PRPP. You cannot deduct employer PRPP contributions on your income tax and benefit return.
Example
Each year, Benoît contributes the maximum amount to his RRSPs and deducts this amount on line 20800 of his income tax and benefit return. In 2024, Benoît becomes a member of a PRPP, and he and his employer agree to make regular contributions throughout the year. Benoît knows his RRSP deduction limit for 2024 is $10,000, so he agrees to contribute $5,000 and his employer agrees to contribute $5,000. When filling out his 2024 income tax and benefit return, Benoît must remember to not include all of the contributions ($10,000) on line 20800 as he has done in prior years because he can only deduct up to $5000 of the contributions he made to his own PRPP. This is because only his PRPP contributions are deductible. Since the employer’s contributions are not included in his income, they are not deductible on Benoît’s income tax and benefit return.
Notes
You can designate contributions you have made to your PRPP as repayments to the Home Buyers’ Plan (HBP) or the Lifelong Learning Plan (LLP). Fill out and include with your income tax and benefit return a Schedule 7, RRSP, PRPP and SPP Contributions and Transfers, and HBP and LLP Activities.
Even if you are no longer employed, you can still contribute to your PRPP up to your available room.
Employer contributions
An employer can make voluntary contributions to your PRPP. Contributions are not included in your income and are not deductible on your income tax and benefit return. Only your contributions to your PRPP are deductible on line 20800. Employer contributions that were made to your plan for the calendar year must be reported on line 20810.
Contributions made with tax-exempt income
For the purposes of contributing to a PRPP, the Income Tax Act allows tax-exempt income earned by an Indian (as defined by the Indian Act), to be included in the calculation of their RRSP deduction limit for the year. Though their PRPP contributions made against tax-exempt income are not tax-deductible in their income tax and benefit return, they can be used as a repayment under the HBP or the LLP. For more information, refer to Lines 7 and 8 – Contributions designated as a repayment under the HBP and the LLP in Guide T4040, RRSPs and other Registered Plans for Retirement . Fill out and include with your income tax and benefit return a Form RC383, Tax-Exempt Earned Income and Contributions for a Pooled Registered Pension Plan.
Forms and publications
Guide T4040, RRSPs and Other Registered Plans for Retirement
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- Date modified:
- 2025-01-03