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An Ontario employee on $80,000 whose employer adds 50 cents per dollar up to 6% of pay is leaving $1,200 a year on the table by saving only 3%. That 3% costs about $1,722 in take-home pay after the RRSP tax saving, and it puts $3,600 into the plan. Over 25 years at 5.5%, the $1,200 never collected would have grown to about $64,204 before tax.
How much employer money am I leaving unclaimed?
The unclaimed amount is the full match minus the match you collect. In the example the full match is $2,400, and it takes $4,800 of your own money to earn it. Put in less and you collect less. The calculator shows the gap in dollars per year and per month.
| You put in | Employer adds | Your cost after tax |
|---|---|---|
| $0 | $0 | $0 |
| $2,400 (3%) | $1,200 | $1,722 |
| $4,800 (6%) | $2,400 | $3,444 |
Ontario, group RRSP, $80,000 of pay.
What does my own contribution really cost after tax?
A payroll RRSP deduction lowers the income tax taken off each cheque, but CPP and EI are still worked out on your full pay. At $4,800 a year, tax falls by $1,423 and take-home pay drops by $3,377. The employer money adds about $68 of extra payroll tax (CPP and EI) on top, so $3,444 of your pay becomes $7,200 in the plan. That’s about 48 cents of your pay for each dollar that reaches it. The take-home pay calculator shows the pay cheque effect for any salary.
How is a group RRSP match taxed compared with a DPSP?
Employer money in a group RRSP counts as pay. The CRA treats it as a taxable benefit, so income tax and CPP apply, and EI too if you can withdraw it while still employed. You then deduct it as an RRSP contribution, which washes out the income tax but leaves the CPP. A DPSP works differently. Employer contributions go in untaxed. You can’t add your own money to it, and the amount lowers your RRSP room the next year. The CRA pages on DPSPs don’t spell out CPP and EI, so ask your payroll office. Some plans also hold the employer share until it vests.
What is the match worth by retirement?
Save the full $4,800 for 25 years at 5.5% and the $7,200 a year grows to about $385,222 before tax, of which $128,407 came from the employer. At a 20% average tax rate on withdrawal the plan is worth about $308,178, against a total after-tax cost to you of $86,108. Those figures assume level pay and a steady return, which real years rarely deliver.
Does the match use up my RRSP room?
Group RRSP money from the employer counts against your RRSP deduction limit. That limit is 18% of last year’s earned income, up to $33,810 for 2026 and $35,390 for 2027, less any pension adjustment. Go more than $2,000 over and the tax is 1% a month. Check the room on your latest notice of assessment before you raise your percentage, and use the RRSP calculator to see your tax saving.
Where does this information come from?
The tax treatment of employer contributions and the RRSP room rules come from the CRA pages listed below; all dollar figures are estimates from this site’s own pay and tax engine (October 2026). Checked in October 2026. This is an independent information site: we provide no services, we do not represent the CRA or any organization, and we do not guarantee that anything here is accurate or current. We accept no liability for decisions based on it. Check the official source before you rely on it. See the full disclaimer.
Frequently asked questions
Is my employer's RRSP match taxable?
In a group RRSP the employer money is a taxable benefit, so tax and CPP apply, and you offset the income tax with the RRSP deduction. A DPSP contribution isn't taxed when paid in. Either way, withdrawals in retirement are taxed as income.
Can I put in more than the match?
Yes, up to your RRSP deduction limit, which is 18% of last year's earned income to $33,810 for 2026. Group RRSP employer money uses that room, and DPSP money reduces next year's room through the pension adjustment.
What happens to the match if I leave the company?
It depends on the plan. Some plans keep the employer share until it vests, and the CRA requires a pension adjustment reversal when someone leaves a DPSP before amounts vest. Read the plan text before you count the money.
Is a 50% match really a 50% return?
Better, after tax. In the Ontario example $3,444 of take-home pay became $7,200 in the plan, about 48 cents of your pay for each dollar saved. The money is taxed when it comes out.