Benefits

RRSP, in plain English.

Workzoom defines RRSP as follows. A Registered Retirement Savings Plan (RRSP) is a Canadian tax-advantaged retirement account. Employees contribute pre-tax dollars; employer matching is common. RRSP contributions...

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The short answer

A Registered Retirement Savings Plan (RRSP) is a Canadian tax-advantaged retirement account. Employees contribute pre-tax dollars; employer matching is common. RRSP contributions must respect the CRA annual contribution limit and integrate with payroll deductions. Workzoom Payroll handles RRSP contributions, matching, and CRA year-end T4 reporting automatically.

How RRSP works.

A Registered Retirement Savings Plan is a Canadian tax-deferred retirement account. In a group plan, employee contributions are deducted from pay and reduce income tax at source, while employer contributions carry different treatment for income tax and payroll tax. Contribution room is personal to the employee and set by the CRA, so the employer administers the deduction but does not own the limit.

Where RRSP goes wrong.

  • Deducting contributions without reducing tax at source, so employees over-withhold all year and wait for the refund.
  • Treating employer contributions identically for income tax and payroll tax purposes when the treatment differs.
  • No mechanism to stop deductions when an employee reaches their personal contribution room.

Where RRSP sits between HR and payroll.

RRSP does not stand alone. The concepts most often paired with it on a Benefits run are Benefits administration, CPP, T4. Each is defined elsewhere in this glossary so you can trace the full chain without leaving the site.

Related terms

Questions about RRSP

A Registered Retirement Savings Plan (RRSP) is a Canadian tax-advantaged retirement account. Employees contribute pre-tax dollars; employer matching is common. RRSP contributions must respect the CRA annual contribution limit and integrate with payroll deductions. Workzoom Payroll handles RRSP contributions, matching, and CRA year-end T4 reporting automatically.
A Registered Retirement Savings Plan is a Canadian tax-deferred retirement account. In a group plan, employee contributions are deducted from pay and reduce income tax at source, while employer contributions carry different treatment for income tax and payroll tax. Contribution room is personal to the employee and set by the CRA, so the employer administers the deduction but does not own the limit.
Deducting contributions without reducing tax at source, so employees over-withhold all year and wait for the refund.

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