Insights & advice
How do RESP contributions work?
November 2022 – 15 min read
Key takeaways
When you add money to a Registered Education Savings Plan (RESP)Opens in a new window, this is known as a contribution.
Contributions can be made by a subscriber, and the government may also contribute money in the form of the Canada Education Savings Grant (CESG)Opens in a new window.
There are some things to think about when it comes to paying in money to avoid any over-contribution penalties, and stay within the lifetime contribution limit.
RESP contribution limits
Who can contribute to the RESP?
Anyone who’d like to contribute to an RESP, like a grandparent or family member, can do so.
It’s a good idea that anyone wishing to add money contact the subscriber (the person who opened the RESP) before contributing to make sure this money doesn’t exceed lifetime contribution limits or plan requirements.
They’ll also need the beneficiary’s’ social insurance number (SIN) to contribute, and so if you’d like to keep this confidential, you could always suggest that they gift you the money and then contribute on their behalf.
Lifetime contribution limit
The lifetime RESP contribution limit is $50,000 per beneficiary.
Although there is no limit on the number of RESP plans you can have in your name – if the child is a beneficiary of more than one RESP – this $50,000 limit includes contributions made in all RESPs combined.
Annual contribution limit
While there are currently no annual contribution limits, you can receive the Canada Education Savings Grant (CESG) Opens in a new windowonly on the first $2,500 in contributions per year, or up to the first $5,000 in contributions, if sufficient carry forward room exists.
Over-contribution penalties
An over-contribution occurs when the total contributions made to a beneficiary in one 1 or more RESP(s) exceed the lifetime limit of $50,000.
Any contributions over and above these amounts will no longer be eligible for any CESG grant amounts. When an over-contribution occurs, you'll l have to pay tax in the amount of 1 percent %per month on your share of the over-contribution until it is withdrawn.
Generally, there is little benefit to contributing more money than necessary to max out the government grants. Without the advantage of the RESP government grants (CESG), you may be better off contributing any extra funds to a Tax Free Savings Account (TFSA)Opens in a new window or Registered Retirement Savings Plan (RRSP)Opens in a new window if you have any remaining contribution room.
For more information on over-contributions and tax implicationsOpens in a new window, visit the Canada Revenue Agency website.Opens a new website in a new window - Opens in a new window You may also want to ask your RESP provider to explain any other conditions or penalties that may apply if you over-contribute to the account.
How much money does the government contribute to an RESP?
RESP savings can be supplemented with government education savings initiatives, including the Canada Education Savings Grant (CESG).
CESG eligibility
The government will supplement contributions to your RESP up to the end of the calendar year in which the beneficiary turns 17 years of age.
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Certain special eligibility requirements must be met for beneficiaries who are 16 or 17 years old. To be eligible, by December 31 of the year a beneficiary turns 15, contributions to your RESP must either:
- total at least $2,000 , or
- have been at least $100 in any 4 previous years.
This means that to be eligible for the CESG grant, you’ll need to start making contributions to the RESP before the end of the calendar year in which the beneficiary turns 15 years of age.
CESG grant amounts
Each year, the government will match your contributions by 20%, up to a maximum of $500. So, you’ll need to contribute $2,500 a year to get the full grant of $500 each year. The lifetime CESG amount that can be received by 1one beneficiary is $7,200.
You can carry forward any unused annual CESG contribution amounts until the beneficiary turns 17. Any remaining amounts for the current year are carried forward for possible use in future years.
Additional (enhanced) CESG amounts
Middle- and low-income families may qualify to receive the additional amount of CESGOpens a new website in a new window - Opens in a new window. If eligible, that means an extra 10% or 20% is added to the first $500 contributed to an RESP each year.
Other government programs
There are some other programs that may also help supplement your RESP contributions. Eligibility for these programs may depend on your income and on meeting certain other requirements:
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Canada Learning Bond (CLB)
The CLB Opens in a new windowprovides an additional incentive of up to $2,000 to help modest-income families start saving early for their child's education.
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Quebec Education Savings Incentive (QESI)
The QESIOpens a new website in a new window - Opens in a new window is a tax incentive that encourages Québec families to start saving early for a child’s post-secondary education.
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British Columbia Training and Education Savings Grant (BCTESG)
To encourage families in British Columbia to start saving early for their children’s post-secondary education, the B.C. Government will contribute $1,200 to eligible children through the BCTESGOpens a new website in a new window - Opens in a new window.
What’s next?
See how RESPs along with other registered savings accountsOpens in a new window can help you save for your child’s education.
Learn about what you can do with contributions made into an RESP if your child doesn't go to college or universityOpens in a new window.
The information provided is based on current laws, regulations and other rules applicable to Canadian residents. It is accurate to the best of our knowledge as of the date of publication. Rules and their interpretation may change, affecting the accuracy of the information. The information provided is general in nature, and should not be relied upon as a substitute for advice in any specific situation. For specific situations, advice should be obtained from the appropriate legal, accounting, tax or other professional advisors.
