Happy New Year to you and hope you had a great start to 2025. As we begin the new calendar year, we would like to inform you of the updated contribution limits and deadlines for various savings accounts, as well as other important financial planning information for 2025.

It is best practice to maximize and utilize the registered contribution limits sooner than later to allow for greater compounding of returns. Along with your contributions, it is important to look at the overall financial plan to ensure your contributions and investments are well-positioned and optimized for tax efficiency and are aligning with your goals.

Let’s dive in to inform you of all the important limits, deadlines, and changes that you need to be aware of for 2025!

Registered Contribution Limit Snapshot

Registered Accounts: Detailed Contribution Limits & Deadlines

Registered Retirement Savings Plan (RRSP)

Contribution Limits:

2023: $30,780

2024: $31,560

2025: $32,490

Contribution Deadline: March 3, 2025

Calculation: The RRSP contribution limit is calculated as 18% of your earned income from the previous year, up to the annual limit, less any pension adjustments. Unused contribution room from previous years can be carried forward.

Registered Education Savings Plan (RESP)

Contributions to Maximize Government Grants:

To maximize the Canada Education Savings Grant (CESG), contribute $2,500 annually. The CESG provides a 20% match on contributions, up to $500 per year. If there is unused grant room from previous years, you can receive up to $1,000 in CESG per year by contributing $5,000. This is subject to the appropriate age of the beneficiary.

Maximum Grant:

The lifetime maximum CESG per child is $7,200.

Contribution Limit:

No annual limit, but a lifetime limit of $50,000 per beneficiary.

Tax-Free Savings Account (TFSA)

Contribution Limit for 2025:

$7,000

Total Contribution Room (since 2009):

$102,000 of total contribution room. Any missed contributions from previous years or any withdrawals made in previous calendar years can be recontributed and caught up.

First Home Savings Account (FHSA)

Contribution Limit:

• $8,000 for 2025.
• $16,000 total contribution limit if account was opened in 2024.
• $40,000 lifetime contribution room ($8,000 per year since account opening).

Registered Disability Savings Plan (RDSP)

Contribution Limit:

• Lifetime Contribution Limit: $200,000
• No Annual Contribution Limit.

Canada Disability Savings Grant (CDSG):

• Matching Grant: Up to 300%. Depends on income and other factors.
• Maximum Yearly Grant: $3,500.
• Lifetime Grant Limit: $70,000.
• Eligibility: Until age 49.

Canada Disability Savings Bond (CDSB):

• No contribution Required.
• Maximum Yearly Bond: $1,000
• Lifetime Bond Limit: $20,000
• Eligibility: Until age 49.

In Retirement or Transitioning into Retirement

RRSP Conversion

• Individuals turning 71 this year can make their final RRSP Contribution this year, but the contribution must be made by end of this year.
• Individuals turning 71 must convert their RRSPs (Registered Retirement Savings Plan) into RRIF (Registered Retirement Income Fund) by end of this year. After conversion to RRIF, there will be no minimum withdrawal requirement this year, but there will be minimum withdrawals required starting next year.

Old Age Security Payments & Claw back

OAS Payment in 2025:

The maximum monthly OAS payment in 2025 is $727.67 for those aged 65 to 74 and $800.44 for those aged 75 and over. However, the exact amount you receive depends on several factors, including:

• How long you've lived in Canada as an adult.
• Whether you qualify for additional benefits.
• Inflation adjustments made by the federal government.

Please check with Service Canada to find out details about your OAS Payment.

Claw back Threshold:

Begins at an annual income of $90,997.

Full OAS Claw back:

For individuals aged 65 to 74, benefits are fully phased out at an income level of $148,451. For individuals aged 75 and older, benefits get clawed back entirely at $154,196.

Individual Income:

The OAS claw back is based on individual incomes, not household income.

CPP Payment Increase in 2025

CPP Indexation:

In 2025, CPP Payments will increase by an indexation factor of 2.6%. This adjustment means that if the monthly CPP payment in 2024 was $1,000, now in 2025, the monthly payment will increase to $1,026.

Please check with Service Canada to find out more details about your CPP Payment.

Pension Income Tax Credit

Credit Amount:

Up to $2,000 of eligible pension income can be claimed as a non-refundable tax credit.

Eligibility:

This credit is available to individuals receiving eligible pension income, such as payments from a registered pension plan or certain annuities.

TAX Deadlines for 2025

For Self-Employed Individuals

Tax Filing Deadline: June 16, 2025

Any taxes owing must still be paid by April 30, 2025. Please speak to your Accountant for details.

Individuals with Regular Employment Income

Tax Filing Deadline and Payment on Taxes owing: April 30, 2025

Please speak to your Accountant for details.

Corporate Tax Return Filing

6 Months After the Corporate Fiscal Year-end.

Please speak to your Accountant for details.

Changes You Need to Know for 2025

Canada Pension Plan (CPP) – Contributions for Individuals

CPP Tier 1 – For Individuals Making $71,300 or below :

• Year’s Maximum Pensionable Earnings (YMPE): $71,300.
• Basic Exemption: $3,500.
• Employee Contribution Rate – 5.95%
• Employee Maximum CPP Contribution - $4,034.
• Self Employed Maximum CPP Contribution - $8,068.

CPP Tier 2 – For Individuals Making over $71,300 up to $81,200 :

• Year’s Additional Maximum Pensionable Earnings (YAMPE): $81,200.
• Any amount between $71,300 to $81,200 is subject to CPP2.
• Additional 4% employee contribution on amount between $71,300 to $81,200 to a maximum of $396.
• Additional 8% contribution for self-employed individuals on amount between $71,300 to $81,200 to a maximum of $792.

Lifetime Capital Gains Exemption (LCGE)

• $1,250,000 in 2025.
• Allows “small-business” owners and family members claim exemption on capital gains tax when they sell shares of their business.
• Subject to eligibility requirements.

Please speak to your Accountant regarding the exemption and its eligibility requirements.

Age Amount Tax Credit

• Increased to $9,028 in 2025.
• Eligibility requirements based on turning 65 or older in tax year.

Please speak to your Accountant regarding the credit and its eligibility requirements.

Other Tax Changes for 2025

Federal Individual Tax Brackets

Basic Personal Amount:

Ranges from $14,538 to $16,129, depending on your overall income.

Alternative Minimum Tax (AMT):

• AMT Rate: Increased to 20.5% from 15% starting in 2024.
• Basic Exemption Amount: Increased to the start of the second from top federal tax bracket, which is $173,205 for 2025.
• Impact: The AMT is designed to ensure that high-income individuals pay a minimum amount of tax, even if they benefit from various exemptions and deductions. It involves a complex calculation that adjusts regular taxable income by limiting access to certain tax benefits.

Please refer to your accountant on how these tax changes may impact you.

We encourage you to review your financial plans with us and make the necessary contributions before the deadlines to maximize your benefits. Should you have any questions or need further assistance, please do not hesitate to contact us.