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There is no Roth IRA in Canada. The Canadian account that works the same way is the TFSA: you put in money you’ve already paid tax on, the growth isn’t taxed, and you can take it out without tax. The dollar limit for 2026 is $7,000.
What is the Canadian version of a Roth IRA?
A Roth IRA is a US plan. The Tax-Free Savings Account is the Canadian one you probably want, and it’s simpler. Room starts to build in the year you turn 18, and only for years you’re a Canadian resident.
Three points from the CRA matter most. Investment earnings inside a TFSA aren’t taxed. Gains and losses don’t change your contribution room. And if you take money out, the room returns the following 1 January, not at once.
How much can I put in a TFSA?
Your room is the total of every annual limit since you turned 18 (or since 2009, if that came later), minus what you’ve put in, plus what you’ve taken out in earlier years. Here are the annual limits.
| Years | Annual limit |
|---|---|
| 2009 to 2012 | $5,000 |
| 2013 and 2014 | $5,500 |
| 2015 | $10,000 |
| 2016 to 2018 | $5,500 |
| 2019 to 2022 | $6,000 |
| 2023 | $6,500 |
| 2024 to 2026 | $7,000 |
Adding those up, someone who has been eligible since 2009 has $109,000 of room in 2026. That total is our own sum of the CRA table, not a printed CRA figure. Your true number is in your CRA account, though the CRA itself says your own records are the safer check, so keep them.
Go over your room and the tax is 1% of the excess each month until you fix it. Try the TFSA calculator to see your room for the year.
What does $7,000 a year become?
At a 5% yearly return (an assumption, not a promise), $7,000 saved each year grows to $90,581 after 10 years, of which $20,581 is growth. After 20 years it’s $239,770, with $99,770 of growth. At 25 years it reaches $347,381, and $172,381 of that is growth. None of the growth is taxed, and that’s the whole appeal.
You can hold a savings account, a GIC or funds inside it. The account is just the wrapper, so the return depends on what’s in it. You can test different returns with the compound interest calculator.
Which is better for me, TFSA or RRSP?
The RRSP is the reverse of a Roth: you get a deduction now and pay tax on withdrawals. Take a contribution of $10,000 with $90,000 of income in Ontario. Our RRSP calculator shows $2,965 less income tax, so the real cost is $7,035. That refund is why a higher earner often starts there.
The TFSA gives you no refund but no tax later, and you can take money out for a car, a roof or a rough year. The RRSP dollar limit for 2026 is $33,810, though your actual room is set by last year’s earnings and any pension adjustment, so check your notice of assessment.
Saving for a first home? The FHSA has deductible contributions and tax-free qualifying withdrawals. It allows $8,000 of room each year, and $40,000 is the lifetime deduction limit. Compare it on the FHSA calculator.
What if I already own a Roth IRA and live in Canada?
This is where it gets tricky. CRA guidance says a Roth IRA doesn’t have the tax deferral that Canadian registered plans get, so income inside it is generally taxable in Canada each year. There’s a treaty election that can defer that, and the CRA advises against making contributions once you’re a resident. Read the CRA’s income tax folio on Roth IRAs, and see a cross-border tax specialist before you move money in or out. We haven’t tested the details for your case.
What mistakes catch people out?
Using a TFSA as a chequing account and putting withdrawals straight back in that year is the classic one. Your room only returns in January. Another is buying something that isn’t a qualifying investment and finding out the tax applies inside the account. Check the CRA’s list of qualifying investments before you buy.
Where the numbers come from
TFSA limits and rules are from Canada Revenue Agency pages, and the RRSP and FHSA limits from CRA pages and our data files, as of September 2026. The RRSP saving and TFSA growth figures come from our calculators, with a 5% return we chose for illustration.
Frequently asked questions
Does Canada have a Roth IRA?
No. The Roth IRA is a US plan. The Canadian account that works in a similar way is the TFSA, funded with after-tax money and with tax-free growth.
What is the TFSA limit for 2026?
The dollar limit for 2026 is $7,000. Your own room also includes unused amounts from earlier years.
When do withdrawals come back as room?
On 1 January of the next year. Re-depositing it earlier can put you over your room.
What happens if I over-contribute to my TFSA?
The CRA taxes the excess at 1% for each month it remains.
Can a Canadian resident keep a Roth IRA?
The CRA says income in a Roth IRA can be taxable in Canada each year unless a treaty election is filed. Read the CRA folio and see a cross-border specialist.
- How Canadian income tax works: brackets and credits
How federal and provincial Canadian income tax stack up, what marginal and average rates mean, and how credits and deductions change your bill
Information only. This page is general information, not tax, legal or accounting advice. Tax-Services.ca is an independent publisher: we don't prepare or file tax returns or offer tax services, and we have no connection with the CRA, Revenu Québec, any government or any company named on this page. Check the figures that matter with an official source or a qualified professional.