RRSP vs TFSA vs FHSA Calculator

How this calculator works: everything starts from the same pre-tax dollar

Every input above is a pre-tax, gross dollar amount — money you haven't paid tax on yet, the way a paycheck arrives before withholding. That single starting point is what makes TFSA, RRSP, and FHSA genuinely comparable, rather than comparing apples to oranges. Each account treats that same gross amount completely differently on the way in and on the way out, and those differences are the entire reason this decision matters:

• TFSA. No tax deduction on contribution, so only what's left after tax actually makes it into the account — gross × (1 − rate now). That grows completely tax-free and comes out completely tax-free, for any reason, at any time.
• RRSP. Fully tax-deductible on contribution, so the full gross amount can go in — the deduction generates a refund equal to the tax you'd otherwise have paid on that income. Growth is tax-deferred, and the full withdrawal amount is taxed as ordinary income at whatever your marginal rate is when you take it out.
• FHSA. The full gross amount goes in, tax-deductible like an RRSP, and a qualifying withdrawal for a first home purchase comes out completely tax-free, like a TFSA. No tax drag on either end — see "What is the FHSA" below.

The bars above show the actual after-tax future value of each path, for your own numbers, compounded at your assumed return over your chosen number of years. C$ values are used throughout because these are Canadian registered accounts.

The tie identity, worked out by hand

Here's the arithmetic behind the "same rates equals a tie" claim, so it isn't just an assertion. Say your marginal rate is 30% both now and at withdrawal, you save C$10,000 pre-tax, invest for 10 years at 7% (a growth factor of roughly 1.9672), and reinvest the RRSP refund. TFSA: only the after-tax C$7,000 gets invested (C$10,000 × (1 − 0.30)), growing to about C$13,770 — and since a TFSA is never taxed again, that's the final number. RRSP: the full C$10,000 gets invested and grows to about C$19,673, then gets taxed at 30% on withdrawal, leaving about C$13,770 after tax — the exact same number as the TFSA, to the cent. That isn't a coincidence or a rounding artifact: multiplyinggross × (1 − rate) × growth and gross × growth × (1 − rate) is the same multiplication in a different order, and multiplication doesn't care about order. Set the rate-now and rate-at-withdrawal fields above to the same number, leave the refund-reinvested toggle on, and the two bars will land on the same value every time — that's this exact identity, running on your own inputs instead of the worked example.

Change either rate and the tie breaks in a predictable direction. Drop the expected retirement rate below the rate now (the classic "I'll be in a lower bracket in retirement" scenario) and the RRSP's lighter tax bite on withdrawal pulls it ahead. Raise the expected retirement rate above the rate now and the TFSA's larger upfront tax cost now — but zero tax ever again — pulls it ahead instead. The calculator above runs this exact comparison on your own numbers instead of a canned example.

Why the refund matters — and why most people quietly lose it

The worked example above depends entirely on one assumption most RRSP calculators skip past silently: that the tax refund generated by the deduction gets reinvested. In practice, most RRSP contributors don't set that refund aside and invest it — it lands as an ordinary tax refund the following spring and gets absorbed into regular spending, a vacation, debt paydown, or just disappears into daily life the way most windfalls do. Turn off "Reinvest the refund" above to see what that actually costs: the calculator switches to investing only gross × (1 − rate now) into the RRSP — the same amount a TFSA saver would have available — and the refund itself,gross × (1 − rate now) × rate now, is treated as money spent rather than compounding for years. The invested portion still gets taxed on withdrawal, so the RRSP path in this mode is strictly worse than the textbook version, and often worse than the TFSA even when your retirement rate is genuinely lower than your rate today. This is the single biggest gap between how RRSPs are supposed to work on a whiteboard and how they actually perform in most people's real financial lives — and it's exactly why this calculator makes the toggle explicit instead of quietly assuming the best case.

What is the FHSA, and when does it actually win?

The First Home Savings Account launched in Canada in April 2023, purpose-built for first-time home buyers. It's structurally unlike either the TFSA or the RRSP on their own — it borrows the RRSP's upfront tax deduction and pairs it with the TFSA's fully tax-free withdrawal, provided the withdrawal goes toward a qualifying first home purchase. The annual contribution limit is C$8,000, and the lifetime contribution limit is C$40,000; unlike the TFSA's limit, which is indexed to inflation and has grown over time (see the TFSA Contribution Room Calculator for that full year-by-year table), both FHSA figures are fixed dollar amounts written directly into the Income Tax Act and are not expected to move with inflation.

Because it's untaxed on both the way in and the way out, an FHSA weakly dominates both a TFSA and an RRSP for the same pre-tax dollar, at any combination of tax rates — check "Include FHSA" above and the third bar will always be at least as tall as the other two, and strictly taller whenever your retirement-withdrawal tax rate is above zero. The catch is eligibility and purpose: it's only open to people who qualify as first-time home buyers in the CRA's specific sense (broadly, you and your spouse or common-law partner haven't owned a home you lived in during the current year or the four preceding calendar years), and the money has to go toward a qualifying home purchase within the account's window or it converts to RRSP-like treatment (transferable tax-deferred, but no longer tax-free) rather than staying fully tax-free. It isn't a substitute for RRSP or TFSA room for savings that aren't earmarked for a home — it's a third, narrower tool that happens to be the best available option for the specific job it's built for.

Can you do all three — and in what order?

Yes, and there's no rule stopping anyone from holding a TFSA, an RRSP, and an FHSA at the same time — each has entirely independent contribution room, tracked separately by the CRA. For someone actively saving toward a first home, a reasonable sequencing is: capture any employer RRSP match first (see below — it's not really part of this comparison at all), then prioritize the FHSA up to its annual and lifetime limits while still eligible, since it's both time-limited and strictly the best after-tax outcome for home-earmarked savings, then split remaining savings between RRSP and TFSA using the rate-now-vs-rate-later comparison this calculator runs. Someone not saving for a first home simply skips the FHSA step and compares RRSP against TFSA directly.

Employer RRSP matching: always take the match

Everything above is a tax-rate comparison — none of it applies to an employer RRSP match, which isn't a tax effect at all. If your employer matches RRSP contributions at 50% or 100% up to some percentage of salary, that match is a guaranteed, immediate 100% return on the matched dollars, credited before a single cent of market growth happens. No legitimate account or investment strategy covered anywhere on this site offers a documented, risk-free return anywhere close to that. Contribute at least enough to capture the full match, every time, before running the rate-now-vs-rate-later comparison above on whatever's left — the match isn't really competing with the TFSA or the FHSA for priority, because nothing beats free money added directly to your balance.

Finding your marginal tax rate

Canada's income tax is layered: a federal bracket schedule plus whichever province you live in adds its own bracket schedule on top, and your marginal rate is the sum of the federal rate and the provincial rate for the bracket your income currently sits in — not a single flat percentage across your whole income. The tables below are pulled directly from this site's verified 2026 tax constants (the same source data behind the Capital Gains Tax Calculator), so the numbers here and there always match.

The "combined top marginal rate" column is the federal top rate plus each province's own top bracket rate — it's the rate on your very next dollar once you're already in the top bracket both federally and provincially, not an average rate across all your income. Ontario and Prince Edward Island each also levy an additional provincial surtax above a threshold that isn't reflected in this table; see the Capital Gains Tax Calculator's notes for the details. Quebec's provincial rates here don't net against the federal abatement Quebec residents receive — see the same notes.

Every default, and why it's set where it is

• C$10,000 pre-tax to save. A round, easy-to-scale number — halve or double it and every output scales linearly with it, since nothing in this model is bracket-dependent beyond the two rate inputs you set directly.
• 30% now, 20% at withdrawal. A common real-world shape: higher earning years now, a materially lower combined income (CPP + OAS + RRIF withdrawals, likely without full-time employment income) in retirement — deliberately picked to show RRSP winning by default, since that matches how the account is usually pitched. Flip the two rates to see TFSA pull ahead instead.
• 20 years invested, 7% return. The same long-run nominal return assumption used across this site's other growth calculators — see the Compound Interest Calculator's FAQ for the reasoning behind that number — over a horizon long enough for compounding to visibly separate the three bars.
• Refund reinvested — on by default. This is the textbook, best-case RRSP assumption; toggle it off to see the honest, more common outcome described above.
• FHSA — off by default. Most savings aren't earmarked for a first home purchase; check the box only when modeling money that actually is.

TFSA vs RRSP, in more depth

This calculator answers "what does the math say for my numbers," but the underlying decision framework — why marginal rates move the way they do over a career, how RRSP withdrawals interact with OAS clawback, and other considerations this pure after-tax-value comparison doesn't capture — is covered in more depth in TFSA vs RRSP for Market Investors. If you haven't yet worked out your actual TFSA contribution room, the TFSA Contribution Room Calculator computes it from your birth year and contribution history rather than assuming you know it offhand.