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Can I continue contributing to my RRSP while working abroad?

You can continue contributing to your RRSP while working abroad if you maintain Canadian residency for tax purposes. Non-residents can only contribute based on unused contribution room prior to leaving Canada, and earned income in Canada is necessary to generate new contribution room. It's important to verify your residency status and track your contribution room before working internationally. Consulting a tax professional is recommended for personalized advice.

2 min read
Written by Peyton Bieda on August 26, 2024

Can You Keep Contributing to Your RRSP While Working Abroad?

The short answer is: it depends. Here's what you need to know:

Residency Status Matters

Your ability to contribute to your RRSP while working abroad largely hinges on your residency status for tax purposes. If you're considered a Canadian resident for tax purposes, you can generally continue contributing to your RRSP1.

Non-Resident Considerations

If you become a non-resident of Canada for tax purposes, things get a bit trickier. As a non-resident, you can still have an RRSP, but your contribution room stops growing. You can only contribute based on any unused contribution room you had before leaving Canada1.

Earned Income and Contribution Room

Remember, your RRSP contribution room is based on your "earned income" in Canada. If you're working abroad and not earning income that's taxable in Canada, you won't be generating new RRSP contribution room1.

Double-Check Your Status

It's crucial to determine your residency status correctly. The Canada Revenue Agency (CRA) looks at various factors to decide if you're a resident or non-resident for tax purposes. These can include:

  • Residential ties in Canada
  • Purpose and duration of your visits to Canada
  • Ties abroad
  • Keep Track of Your Contribution Room

    Before you head off on your international adventure, make sure you know your available RRSP contribution room. You can find this information on your most recent Notice of Assessment from the CRA1.

    Final Thoughts

    Working abroad can be an exciting opportunity, but it does complicate your RRSP situation a bit. If you're planning to work outside Canada, it's a good idea to consult with a tax professional who can give you personalized advice based on your specific circumstances.

    Remember, your RRSP is a powerful tool for your retirement savings, so it's worth taking the time to understand how your international work plans might affect it. Safe travels and happy saving!