Residents & Fellows

The deadline to contribute to your Registered Retirement Savings Plan (RRSP) and claim a deduction on your 2025 personal income tax return is March 2, 2026. RRSP contributions reduce your taxable income in the year claimed, while investment earnings inside the plan accumulate on a tax-deferred basis. In practical terms, an RRSP provides two benefits: an immediate tax deduction and tax-deferred growth on investments held within the plan.

Your deductible RRSP contribution is based on your available contribution room. For the 2025 tax year, the maximum  contribution limit is the lesser of 18% of your prior year’s earned income (generally employment and self‑employment income) or $32,490, plus any unused contribution room carried forward from previous years. Your personal RRSP deduction limit is reported on your 2024 Notice of Assessment and can also be viewed through CRA My Account. It is important to confirm your available room before contributing, as excess contributions beyond your limit (other than the $2,000 lifetime buffer) may be subject to a 1% per month penalty tax until corrected.

Canada’s income tax system levies federal and provincial taxes on individuals. Canada uses a progressive (graduated) income tax system where your earnings are taxed at higher rates (tax brackets) as your income increases. Tax brackets determine the rate of tax paid for each additional dollar of income within the defined bracket/threshold. Those with lesser incomes pay a lesser percentage of taxes on the income earned in lower tax brackets, while those earning higher incomes in higher tax brackets have to pay a higher rate of tax.

In addition to federal income tax, provincial taxes are imposed by the province or territory in which you reside or carry on business or professional activities. Therefore, a physician working in multiple provinces or territories will be required to allocate their professional earnings between the various provinces or territories. Provincial tax rates, tax brackets, and credits vary by province and are calculated using the taxable income calculated under federal income tax rules on schedules accompanying the T1 Individual tax return.

Effective June 16, 2025, the Canada Revenue Agency (CRA) will begin transitioning all business correspondence to online mail. This change will apply to physicians with Medicine Professional Corporations (MPCs), holding corporations, and unincorporated medical practices that are registered for GST/HST, payroll, or other CRA business program accounts. If a medical practice operates under a business number in any form, this update will affect how CRA correspondence is delivered.

As part of this transition, the CRA will no longer issue paper mail for most business-related notices. Instead, business owners will be required to log into their My Business Account to view notices of assessment, installment reminders, GST/HST filings, and other important correspondence. It is the responsibility of the business account holder to monitor this online account regularly and ensure that contact information is current.

To avoid missing time-sensitive messages, it is essential to set up email notifications within the CRA account. Once enabled, an alert will be sent any time new mail is available in My Business Account. These notifications will not include sensitive details, but they serve as a prompt to log in and review any new correspondence. Email alerts will be sent with the subject line:  “New mail from the Canada Revenue Agency / Nouveau courrier de l'Agence du revenu du Canada.”

The Registered Retirement Savings Plan (RRSP) contribution deadline to receive a tax deduction on your 2024 income tax return is March 03, 2025.  The RRSP allows individual taxpayers to deduct the amounts contributed.   The earnings (interest, dividends, capital gains), accumulate in the plan free of current tax so that they grow more quickly than the taxable earnings of investment made by the taxpayer directly in a taxable account would. Thus there are two benefits to an RRSP: first the current tax savings resulting from the deduction of contributions, and second the accumulation of tax-free earnings on money while in the plan.

You can deduct RRSP contributions based on the sum of your current year contribution limit plus your carryforward contributions. The maximum amount that can be contributed to your 2024 RRSP is the lesser of (1) 18% of your earned income from the previous year (wages/salary and self-employment income) or (2) $31,560 plus your carryforward contributions.   You can obtain your 2024 RRSP contribution limit on your 2023 Notice of Assessment or at My CRA. If you exceed the maximum contribution limit, the excess amount will be subject to a 1% per month penalty until you correct the excess contribution by withdrawing the excess amount.