Tax-Free Savings Account

TFSA Withdrawal & Re-contribution Calculator

The rule that catches most people out: money you take out of a TFSA does not free up room until January 1 of the following year. Check before you re-contribute.

Your Situation

Enter the room you had on January 1 before any contributions this year.

How to Use This Calculator

  1. Enter your contribution room at the start of the year. This is your available room on January 1, before any contributions this year. Check it in CRA My Account, but verify against your own records too.
  2. Enter how much you have already contributed this year. Every dollar you have already put in reduces the room you have left.
  3. Enter the amount you want to withdraw. This does not free up room this year — the calculator shows you what it does instead.
  4. Enter what you plan to put back this year. This is the number that catches people out. If it is more than your remaining room, you have an over-contribution.
  5. Click Check My Room. The verdict box tells you either that you are safe or exactly how much you would over-contribute.
  6. Read the safe-to-re-contribute figure. This is the maximum you can put back this year without triggering a penalty.
  7. Check the breakdown table to see your room today, your room after the withdrawal (unchanged), and the amount that returns on January 1.

The Rule That Catches People Out

Most registered accounts work the way you would expect: take money out, and you can put it back. A TFSA does not work that way within the same calendar year. The amount you withdraw is added back to your contribution room on January 1 of the following year, not immediately.

So if you have $2,000 of room, withdraw $10,000 in March, and try to put the $10,000 back in June, you have over-contributed by $8,000 — even though the money was yours and it came out of the same account a few months earlier. The penalty is 1% per month on the highest excess amount, for as long as it stays in the account.

Planning tip: if you need money in and out within the same year, size the withdrawal so you never exceed the room you still have. If you are withdrawing to spend and will not replace it, the timing is irrelevant — the room returns the following January either way.

Frequently Asked Questions

When exactly does the withdrawn room come back?

On January 1 of the year following the withdrawal. A withdrawal in January and a withdrawal the following December both restore room on the same date — the next January 1. That makes late-year withdrawals slightly more attractive if you plan to re-contribute, because the wait is shorter.

What is the penalty for over-contributing?

1% per month on your highest excess amount for each month it stays in the account. There is no grace period and no cap, so a large accidental over-contribution gets expensive quickly. The CRA does have a process to waive or cancel the tax in genuine, reasonable-error cases, but you have to apply for it.

Do I get room back for investment losses?

No. Only the dollar amount you actually withdraw is added back. If you contributed $10,000, the account fell to $6,000, and you withdraw the $6,000, only $6,000 returns to your room. The $4,000 lost is gone permanently from a contribution-room perspective.

Does a withdrawal affect my income or benefits?

No. TFSA withdrawals are not taxable income, are not reported on your tax return, and do not affect income-tested benefits like the GIS or the Canada Child Benefit. This is a key difference from RRSP or RRIF withdrawals.

Related Calculators

TFSA Contribution Room TFSA Growth Calculator RRSP Withdrawal Tax RRSP Calculator
Disclaimer: This calculator applies the published TFSA withdrawal and re-contribution rules for planning purposes. Always confirm your actual contribution room with the CRA or your financial institution before making a contribution. Not tax advice.