Payroll RRSP Deductions

[lambda95]

“You can deduct the money you put into your RRSP from your taxable income, which may reduce the amount of tax you have to pay when you file your return. You also get an immediate tax break when you have your contributions taken straight off your pay.” This is from the manulife website.

For the record I think I’ve figured it out, even with immediate tax breaks I still paid more tax than needed, so there is an additional refund now when filing taxes.

[CanadaTaxSucks]

I have a similar question regarding to how to report the group benifits for the RRSP.

I basically contribute 4% of each of my payroll to rrsp and my company matches the same amount upto 5000 per year.

In year 2022, I contributed RRSP from payroll and I also made a lumpsum pay for 3000 before end of Feb,2023.

I found on CRA that for my 2023 RRSP calculation was like this

Step 1: Calculation of unused RRSP deduction limit at end of 2022Details $ Amount

2022 RRSP deduction limit	10000.00
Minus  Allowable RRSP contributions deducted in 2022	− 3,000.00
Minus Employer contribution to PRPP for 2022	− 0.00
Equals Unused RRSP deduction limit at the end of 2022	7000.00

Step 2: Calculation of additional deduction limit based on 2022Details $ Amount

18% of 2022 earned income of 50000.00 (Maximum of 30,780.00 allowed)	9000.00
Minus  2022 pension adjustment	− 0.00
Minus  2023 prescribed amount for connected persons	− 0.00
Equals  Additional deduction limit based on 2022	9000.00

Step 3: Calculation of 2023 RRSP deduction limitDetails $ Amount

Unused RRSP deduction limit at the end of 2022	7000.00
Plus Additional deduction limit based on 2022	+ 9000.00
Minus 2023 net past service pension adjustment	− 0.00
Plus 2023 pension adjustment reversal	+ 0.00
Equals 2023 RRSP deduction limit	18000

***Please note that some numbers were modified by me for privacy reasons

It looks like for year of 2022, I only contribute 3000, does it mean in the T4 slip, my RRSP contribution was not included? My box 20 was empty. Also, I got RRSP tax receipts from my group retirement account which indicated that I did make contribution. Should I spearately report that in the turbotax software? Thanks

[lambda95]

I can’t speak to your situation unfortunately, but I would recommend being cautious of any of the answers provided previously in this post. I ended up clarifying my questions with a tax accountant.

Best of luck to you!

[TurboTaxGinette]

@CanadaTaxSucks You only report what you see on the T4 slip in the T4 area. When you get to the RRSP you only enter the amount of contributions included on the RRSP slip. Your calculations are unclear. Please see our TurboTax video for clarifications: How do I enter RRSP contributions in TurboTax Online?

NOTE: The contributions made from beginning of March 2022 to end of February 2023 are included in the 2022 tax return. Contributions made from beginning of March 2023 and end of  February 2024 are included in your 2023 tax return.

Thank you for choosing TurboTax.

[Jity22]

This issue has caused a lot of confusion before i explain i will define some important tax return terms and box Numbers on your T4;

Group RRSP = Employee contributed RRSP (pre tax) + Employer Matched RRSP (pre tax)

Box 14: Total pre tax Income (Income before tax = Sum of pre tax income on all your pay slip for the year + Bonus pay + employer matched RRSP). Note that employer matched RRSP is considered as an income to an employee.

Taxable Income: This is the amount of income subject to tax, after deductions (such as RRSP). Note that there is no line number  on T4 slip for taxable income, the taxable income can only be determined at tax return stage.

Pay slip taxable income: Pre tax income on your pay slip  - Employee contributed RRSP pre tax

Pay slip paid tax= Tax paid on Pay slip taxable income

Box 22: Income tax paid on all pay slip taxable income for the year (Sum of pre tax income on all your pay slip for the year - sum of Employee contributed RRSP for the year)

Box 22: Income tax paid = sum of Pay slip paid tax for the year

Tax deductions: are amounts you subtract from your total income, making your taxable income lower. This means you’d be charged taxes on a smaller amount of income (https://turbotax.intuit.ca/tips/popular-canadian-tax-benefits-deductions-and-credits-in-2023-14180). Note that RRSP are tax deductible

When you upload a T4 to turbo tax it will read box 14 and box 22, if you have contributed to group RRSP it will appear that you have underpaid your taxes as turbo tax does not have information on your Pay slip taxable income, therefore you have to input your group RRSP contribution (Employee contributed RRSP + Employer Matched RRSP ) as a deduction on turbo tax. Remember that your employer have included Employer Matched RRSP as an income on box 14. You can always try a dry run or simulation by uploading only T4 without any deduction or credit and you will see that it appears that you have heavily underpaid your taxes. (you can use this turbo tax quick calculator   https://turbotax.intuit.ca/tax-resources/canada-rrsp-calculator.jsp)