Money Management, Personal Finance

What is the 2023 TFSA Contribution Limit?

by Modern Money

Summary: 2023 TFSA Contribution Limit

Wondering what the 2023 TFSA contribution limit will be? Well, the wait is finally over as it has officially been announced! The 2023 limit is $6,500, $500 more than the amount set in 2022.

TFSA Contributions

The amount of money that you can contribute to your TFSA is limited each year and there is a specific contribution limit from 2009 onward, as TFSAs were first introduced in 2009 by the Canadian government.

With this TFSA contribution limit announcement, the total contribution room available in 2023 for someone who has never contributed and has been eligible for the TFSA since its introduction in 2009 is $88,000.

Here is the contribution limit for each year since TFSAs were introduced:

2009$5,000
2010$5,000
2011$5,000
2012$5,000
2013$5,500
2014$5,500
2015$10,000
2016$5,500
2017$5,500
2018$5,500
2019$6,000
2020$6,000
2021$6,000
2022$6,000
2023$6,500

Your contribution room accumulates beginning in the year in which you turned 18. For example, if you turned 18 in 2015, you would have a TFSA contribution limit of $57,000 (this includes the 2023 contribution limit).

If you accidentally over contribute to your TFSA, 1% of the excess contribution will be taxed every month until the over contribution is withdrawn. Although 1% might not seem like a lot, it adds up quickly when it’s eating at the savings or investments that you’re trying to grow. A good way to avoid this is by keeping track of your TFSA contribution room by checking your CRA My Account.

Benefits of a TFSA

The biggest benefit is that earnings in your TFSA are tax-free. When you contribute to a TFSA, you don’t receive an up front tax break like you do with an RRSP, but you will receive big breaks in the future, as your investments (stocks, bonds, etc.) and the gains you earn on those investments will not be subject to any taxes.

To learn more about TFSAs, check out our article on Understanding TFSAs. If you already have a TFSA and want to maximize your investments, check out our article on TFSA Investment Options and Strategies.

For the Government of Canada guide to TFSAs, click here.

About Modern Money

This article is brought to you by the Modern Money research team. The insights, information and guidance that you need to take control from those who understand you best.

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