Financial Strategy for 2025

The year 2025 is officially in full swing, which means it’s the perfect time to refresh yourself on the adjustments to RRSP contributions, federal tax brackets, and OAS thresholds. Here, we outline these changes and share everything you need to know about them.

RRSP Contribution Limits for 2025

The Registered Retirement Savings Plan (RRSP) is one of the best tools for tax-deferred retirement savings. For 2025, the maximum RRSP contribution limit has increased to $32,490, up from $31,560 in 2024.¹

Your personal RRSP contribution limit is 18% of your earned income from the previous year up to the annual limit. This means that to contribute the entire $32,490, you would need to have earned at least $180,500 in 2024.

If you haven’t used your full RRSP contribution in past years, the good news is that unused contribution limits carry forward. This flexibility allows you to contribute more in future years when your income might be higher.

Federal Tax Brackets for 2025

Every year, the federal government adjusts tax brackets to account for inflation. Here’s how the new brackets break down for 2025:²

• 15% tax rate – Income up to $57,375
• 20.5% tax rate – Income between $57,376 and $114,750
• 26% tax rate – Income between $114,751 and $177,882
• 29% tax rate – Income between $177,883 and $253,414
• 33% tax rate – Income over $253,414

Old Age Security (OAS) Clawback in 2025

Old Age Security (OAS) is a government benefit available to most seniors aged 65 and older. However, if you have a high income, you may have to repay part of your OAS benefits through a clawback (officially called the OAS Recovery Tax). According to the Government of Canada, if your net world income exceeds the threshold amount ($86,912 for 2023), you have to repay part of your entire OAS pension.

In 2025, the OAS clawback threshold starts at $90,997. For every dollar of income above this amount, you’ll have to repay 15% of the difference between your income and the threshold.

Basic Personal Amount (BPA)

In addition to the changes in the RRSP contribution limits, tax brackets, and OAS threshold, there has also been a change to the Basic Personal Amount (BPA). The BPA is the amount of income you can earn before paying any federal income tax. In 2025, the BPA increased to $16,129, which will help lower taxes for many Canadians.³

With these updates to RRSP limits, tax brackets, and OAS clawbacks, now is a great time to review your financial strategy for 2025. Whether you’re planning for retirement, optimizing your tax savings, or maximizing your benefits, take advantage of these adjustments to make the most of your income.