After Tax Canada / TFSA vs RRSPVersion française
TFSA vs RRSP calculator (2026)
An RRSP saves tax now and is taxed on withdrawal; a TFSA gets no deduction but comes out tax-free. Enter the amount you want to save, your salary and province, an assumed return, and the tax rate you expect in retirement to see which account leaves more after tax, on the same out-of-pocket dollars, in every province and in Quebec.
Ontario · 2026
$0about even after tax after 20 years, on the same out-of-pocket dollars
Tax saved now (RRSP): $2,991
Same dollars, two accounts
| RRSP | TFSA | |
|---|---|---|
| Amount invested | $10,000 | $7,009 |
| Tax saved now | $2,991 | $0 |
| Value before withdrawal tax | $26,533 | $18,598 |
| Tax on withdrawal | $7,935 | $0 |
| Value after tax | $18,598 | $18,598 |
When the retirement rate equals the current effective rate on the contribution, the two sides tie exactly: the RRSP deduction now and the tax later cancel out, and the TFSA's smaller after-tax investment grows to the same after-tax value.
How the comparison is calculated
The RRSP contribution is the full pre-tax amount. The tax saved now is the engine difference: income tax at your salary minus income tax at your salary less the contribution, federal plus provincial tax only, since RRSP contributions do not change CPP, EI, or QPIP. The TFSA contribution is that out-of-pocket cost: the pre-tax amount minus the tax saved. Both sides grow at the same assumed annual return for the same number of years. The RRSP withdrawal is taxed in full at the retirement rate you enter; the TFSA withdrawal is tax-free. The comparison assumes the RRSP contribution is within your available room; a contribution above your room saves no tax this year on the excess part.
New TFSA room in 2026 is $7,000 a year, and unused room carries forward; withdrawals restore room on January 1 of the next year. New RRSP room is 18% of the previous year's earned income up to $33,810 for 2026, plus unused room, and the exact figure is on your CRA notice of assessment.
Make your take-home work harder
Your paycheque is only half the story. These are the account types Canadians use to put after-tax money to work. What follows is factual information, not financial advice.
High-interest savings account
A savings account that pays a higher rate than a chequing account. Money stays liquid and earns interest while you keep it.
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Investment account
An account for buying investments such as ETFs and stocks. It can be registered (TFSA, RRSP, FHSA) or non-registered.
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Bank account
A chequing account for daily spending and bill payments, often bundled with savings and credit products.
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Disclosure: if partner offers are listed here in the future, they will be clearly labelled, and we may earn a commission. Account descriptions are factual information, not financial advice.
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Worked examples, $10,000 at 5% for 20 years
| Salary · retirement rate | Tax saved now | RRSP after tax | TFSA after tax | Ahead by |
|---|---|---|---|---|
| Ontario · $100,000 salary · retirement 29.9% (current rate) | $2,991 | $18,598 | $18,598 | Tie |
| Ontario · $100,000 salary · retirement 20% | $2,991 | $21,226 | $18,598 | RRSP $2,629 |
| Ontario · $100,000 salary · retirement 50% | $2,991 | $13,266 | $18,598 | TFSA $5,331 |
| Quebec · $100,000 salary · retirement 20% | $3,607 | $21,226 | $16,963 | RRSP $4,263 |
Same out-of-pocket dollars in both accounts · return is an assumption, not a forecast · 2026 tax tables · verified 2026-09-20 · how we calculate
FAQ
What is the difference between a TFSA and an RRSP in one sentence?
An RRSP contribution is deducted from your taxable income now and taxed in full when you withdraw it, while a TFSA contribution gets no deduction but grows and comes out tax-free.
Why does the TFSA column invest less than the RRSP column?
The comparison uses the same out-of-pocket dollars, not the same headline amount. On a $10,000 pre-tax amount at a $100,000 Ontario salary, the RRSP contribution saves $2,991 in tax now, so it really costs $7,009 out of pocket. The TFSA side therefore invests $7,009: the same money you actually part with. Comparing $10,000 in both accounts would compare $10,000 of pre-tax money with $10,000 of after-tax money, which is not the same sacrifice.
When does the RRSP come out ahead?
When your tax rate in retirement is lower than your effective rate on the contribution now. On the $100,000 Ontario example, the effective rate on the $10,000 contribution is 29.9%. At a 20% retirement rate over 20 years at 5%, the RRSP reaches $21,226 after tax against $18,598 for the TFSA, so the RRSP is $2,629 ahead: the deduction was taken at 29.9% and the withdrawal is taxed at only 20%.
When does the TFSA come out ahead?
When your tax rate in retirement is higher than your effective rate on the contribution now. On the same example at a 50% retirement rate, the RRSP reaches $13,266 after tax against $18,598 for the TFSA, so the TFSA is $5,331 ahead: the withdrawal is taxed at 50% while the TFSA withdrawal is tax-free. When the two rates are equal, the sides tie exactly: on the example both reach $18,598 after tax.
How much room do I have in each account?
New TFSA room in 2026 is $7,000 a year, unused room carries forward, and withdrawals restore room on January 1 of the next year. New RRSP room is 18% of the previous year's earned income up to $33,810 for 2026, plus unused room, minus any pension adjustment, and the exact figure is on your CRA notice of assessment. This calculator assumes the RRSP contribution is within your available room; a contribution above your room saves no tax this year on the excess part.
Is an RRSP withdrawal really fully taxable?
Yes. Every dollar withdrawn from an RRSP counts as taxable income in the year it comes out, including the growth, which is why the retirement rate in this calculator applies to the whole future value. A TFSA withdrawal is not counted as taxable income at all, which is also why it does not raise your taxable income in the withdrawal year. Withholding tax taken at withdrawal time is only a prepayment: the final tax is settled on your return at your marginal rate.
What does this comparison leave out?
It leaves out fees, employer matching, spousal RRSPs, the FHSA, and income-tested benefits in retirement, and it assumes the same return in both accounts for the whole period. The return is an assumption you enter, not a forecast, and the retirement rate is an assumption too: change either one to see how sensitive the answer is. In Quebec the same logic applies with Quebec figures: on a $100,000 salary the $10,000 contribution saves $3,607 now, and at a 20% retirement rate the RRSP reaches $21,226 against $16,963 for the TFSA.