Leverage Calculators
RRSP loan gross-up.
See how borrowing to maximise your RRSP contribution creates a multiplier effect: the tax refund pays down the loan, leaving you with a larger RRSP balance for almost no extra out-of-pocket cost.
An RRSP loan strategy borrows to contribute more now and uses the resulting tax refund, which is the contribution multiplied by your marginal rate, to pay the loan down. This calculator shows the refund, the loan cost and the larger RRSP balance that results.
Source: CRA — Line 22100: Carrying charges, interest expenses and other expenses; CRA — How contributions affect your RRSP/PRPP deduction limit · As of
Cite this page: TNAADO Tools, “RRSP Loan Gross-Up Calculator”, https://tools.tnaado.ca/calculators/leverage/rrsp-loan/
Inputs
Result
Fill the form and press Calculate.
How the RRSP gross-up works
The gross-up formula is straightforward: Gross-up = Cash available / (1 − Marginal tax rate). At a 30% marginal rate, $10,000 grosses up to $14,286: you borrow $4,286 and contribute the full $14,286. The tax refund on the larger contribution (also ~$4,286) pays down the loan, less a small interest cost.
The strategy is most powerful for high-income earners: at a 50% marginal rate the multiplier is 2.0x, doubling your contribution. RRSP loan interest is not tax-deductible (unlike investment loans), so keep the term short.
Worked example: $10,000 of cash, $100,000 income, Ontario
Suppose you have $10,000 to put into an RRSP and earn $100,000 in Ontario, where the marginal rate is 31.48%. Grossing up means contributing enough that the refund on the whole contribution repays the loan: $10,000 ÷ (1 − 0.3148) = $14,594. You borrow $4,594 for 12 months at 5.5%, contribute $14,594, and expect a refund of $4,594.
| Line | Amount |
|---|---|
| Cash contribution | $10,000 |
| Loan amount | $4,594 |
| Total RRSP contribution (the gross-up) | $14,594 |
| Marginal tax rate | 31.48% |
| Tax refund on the full contribution | $4,594 |
| Loan interest for 12 months at 5.5% | $252.69 |
| Refund after repaying loan and interest | -$253 |
| Extra RRSP value after 25 years at 6% growth | $19,718 |
- The refund repays the loan but not the interest. Because the loan equals the refund, the $252.69 of interest is a real out-of-pocket cost; the calculator shows it as -$253.
- The long-run gain is an assumption. $19,718 is the extra $4,594 contribution compounding at 6% for 25 years: $4,594 × 1.0625. If your growth assumption is lower, the figure shrinks.
Next steps: see the plain contribution saving with the RRSP tax savings calculator, project the account with the RRSP calculator, or compare a personal loan’s cost with the personal loan calculator.
How this is calculated
- Marginal rate = combined federal and provincial rate on your income, from the same 2026 tax engine as the income tax calculator.
- Gross-up = cash ÷ (1 − marginal rate), capped at the RRSP room you enter. Loan = gross-up − cash.
- Tax refund = gross-up × marginal rate. Loan interest = loan × rate × months ÷ 12, treated as simple interest.
- Retirement values = contribution × (1 + growth)years, for the cash alone and for the full gross-up.
The CRA says RRSP contributions are deductible within your RRSP deduction limit, and lists interest paid on money borrowed to contribute to an RRSP among amounts you cannot deduct (CRA, How contributions affect your RRSP deduction limit, checked 1 October 2026). The 2026 RRSP dollar limit is $33,810 (CRA limits table). The calculator uses one marginal rate for the whole contribution, so a contribution that crosses a bracket will refund slightly less than shown, and the refund arrives only after you file, so the loan accrues interest until then.
Borrowing to invest carries risk. This is an illustration, not financial advice; speak to a licensed adviser before borrowing to contribute.
TNAADO Inc. · Toronto
The gross-up trick, and its one hard limit
An RRSP loan works because the deduction generates a refund, and the refund can then be put back into the RRSP and deducted again. Borrowing enough that the refund repays a large part of the loan converts a modest amount of cash into a much larger contribution, provided you genuinely have the room and you genuinely apply the refund to the loan rather than spending it.
The mistake people make. Expecting to deduct the loan interest. Interest on money borrowed to contribute to an RRSP is specifically not deductible, unlike interest on money borrowed to invest in a non-registered account. That single rule is why the strategy only works when the loan is cleared fast, usually inside a year, and why a multi-year RRSP loan at a high rate is a losing trade no matter how good the refund looked.
Frequently asked questions
What is an RRSP gross-up loan?
You borrow a small amount on top of your own cash to make a larger RRSP contribution, then use the tax refund on the whole contribution to repay the loan. The gross-up amount is your cash divided by one minus your marginal rate.
Is RRSP loan interest tax deductible?
No. The CRA lists interest paid on money borrowed to contribute to an RRSP among the amounts that cannot be deducted, so the interest is a pure cost, which is why short loan terms are better.
How much can I contribute to an RRSP in 2026?
The annual dollar limit is $33,810 for 2026, and your own limit is the lesser of 18% of your previous year’s earned income and that figure, less any pension adjustment, plus unused room. The gross-up in this tool is capped at the room you enter.
Why does the calculator show a small negative number after the refund?
The refund equals the loan by construction, so the interest paid is left over as a cost: $252.69 here, shown as -$253. The benefit is the larger RRSP balance, not extra cash.
When does the refund arrive?
After you file your return and the CRA assesses it, so the timing varies. Until then you carry the loan. The calculator assumes the loan period you enter and does not know when your refund will actually land.
Disclaimer
Estimates for educational purposes only. Verify your RRSP contribution room with CRA and consult a licensed advisor before borrowing to invest.