Earned Income

by Tax Guy - Burlington Accountant on February 1, 2010 Print This Post Print This Post

The RRSP limit is calculated based on earned income and is different from taxable income or net income for tax purposes. Earned income is calculated as follows:

The sum of

  • Salary and taxable benefits
  • Self-employed business income and active partnership income
  • Rental and royalty income
  • Taxable child support and spouse support payments
  • Income from supplementary unemployment insurance benefit plans
  • Research grants
  • CPP & QPP disability payments
  • Employee profit sharing plan allocations


  • Union or professional dues deducted from employment income
  • Employment expenses deducted
  • Losses from employment
  • Loss from self-employment or an active partnership
  • Deductible child or spousal support payments
  • Current rental losses

About The Tax Guy...

Dean Paley CGA CFP is a Burlington accountant and financial planner who services individuals and business owners locally, nationally and internationally. Dean has appeared in the National Post, Toronto Star and Metro News.

To find out more, visit Dean's website Dean Paley CGA CFP or connect via Twitter @DeanPaleyCGACFP.

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Farham February 19, 2011 at 3:08 pm

Hello Tax Guy, amazing website and blog.
My only income is from capital gains. i had 50000 taxable capital gain last year. is this income considered as an “earned income” for the purpose of RRSP?
Thank you

Tax Guy February 21, 2011 at 4:22 pm

No. Capital gains and dividends are not earned income.

bea salzborn February 25, 2011 at 2:57 pm

My daughter earned income was $13000.00 last year. The only duductions she has are dues for membership at rec centres. How much can she contribute to an RRSP.

Tax Guy February 25, 2011 at 3:38 pm

Hi there,
Take a look at How Much Can I Contribute To My RRSP?. For 2010, she can contribute 18% of her 2009 earned income. For 2011, it would be 18% of 2010’s earned income.

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