The annual TFSA dollar limit is fixed at a base amount of $5,000, indexed to inflation for each year after 2009 and rounded to the nearest $500.
The federal indexation rate for 2026 is calculated as the average of the monthly Consumer Price Index (CPI) for the 12-month period ended Sept. 30 of this year divided by the average CPI for the 12-month period ended Sept. 30 of the previous year. CPI data for September 2025 will be released on Oct. 21, so the 2026 indexation rate will be officially announced in the coming weeks.
However, there’s no need to wait for one month of CPI data to ascertain the 2026 TFSA dollar limit.
“It’s virtually impossible to reach $7,500 with only one month of unknown data remaining,” Dany Provost, director of financial planning and tax optimization with SFL Expertise in Quebec, wrote in an email, in reference to the TFSA dollar limit being rounded to the nearest $500.
To reach a $7,500 TFSA dollar limit, “according to my calculations, inflation would have had to run at an annualized rate of at least 135.3% for September — and we would certainly have noticed if that had happened,” Provost wrote.
Annual inflation in August, for example, was 1.9%.
Care with TFSA contribution room
TFSA contribution room begins accumulating in the year a Canadian turns 18, regardless of whether they open an account. While contributions to a TFSA are not tax deductible, withdrawals of contributions and growth from the account are tax-free.
As explained on the government website, TFSA contribution room is the total of the TFSA dollar limit of the current year, any unused TFSA contribution room from previous years and any TFSA withdrawals made in the previous year.
If a taxpayer doesn’t correctly calculate their TFSA contribution room, they could mistakenly overcontribute. Penalties for overcontributions are 1% per month on the excess amount, and many months could pass before a taxpayer becomes aware of an overcontribution, increasing the dollar amount of the penalty. The Canada Revenue Agency (CRA) typically sends a letter or notice of assessment to the taxpayer the year after the excess amount arises, assuming the agency receives all TFSA records from the financial institution.
The CRA assessed $166 million in TFSA overcontribution penalties in the 2024 tax year, up from nearly $131 million in the 2023 tax year and up from $15 million a decade ago in the 2015 tax year. The average TFSA excess tax assessed for 2024 was $1,252.
Taxpayers are ultimately responsible for their own TFSA records, and financial advisors saytaxpayers shouldn’t rely on information in the CRA’s My Account portal, because that information may not be up-to-date, and certainly isn’t up-to-date early in the year before TFSA information slips from financial institutions have been received and processed by the CRA.
In 2025 in particular, TFSA information in My Account was delayed to June for most taxpayers, because of slip processing delays. As such, taxpayers may need to be particularly careful about overcontributions this year.
Industry professionals have suggested that some TFSA holders would benefit from an overcontribution cushion, as with RRSPs. Generally, taxpayers must pay a tax of 1% per month on contributions that exceed their RRSP deduction limit by more than $2,000.
Calculating contribution room can be particularly challenging for taxpayers who tend to make sporadic TFSA contributions or withdrawals and don’t maintain good records. The CRA has a worksheet to help calculate TFSA contribution room.
Here are the TFSA dollar limits by year:
- 2024–2026: $7,000
- 2023: $6,500
- 2019–2022: $6,000
- 2016–2018: $5,500
- 2015: $10,000
- 2013–2014: $5,500
- 2009–2012: $5,000
