See how much tax-free growth in a TFSA is worth compared with the same investment in a non-registered account taxed on the gain.
Use this to put a dollar figure on tax-free growth. The first result is what the account would be worth inside a TFSA, where neither growth nor withdrawals are taxed. The last result is the same investment in a non-registered account, after tax on the gain.
What to enter as the tax rate: for capital gains, half the gain is taxable, so the effective rate is about 50% × your marginal rate. At a 29.65% marginal rate that is about 14.83%. For interest income, which is fully taxable every year, enter your full marginal rate. Eligible Canadian dividends fall in between because of the dividend tax credit.
Formula: monthly compounding at the assumed return; taxable value = contributions + growth × (1 − tax rate).
Worked example (illustrative): $7,000 now plus $300 a month for 20 years at an assumed 5% gives about $142,300 in a TFSA. Contributions total $79,000 and growth is about $63,300. In a taxable account with gains taxed at 14.83% when sold, you would keep about $132,900, roughly $9,400 less.
Limits: the taxable figure is simplified and flattering, because interest and dividends are usually taxed every year, which slows compounding. Returns are assumptions, not forecasts. The 2026 TFSA limit is $7,000; to compare a TFSA with an RRSP, see the TFSA vs RRSP tax math guide. General information only.
Deadlines, Penalties and Official Sources
How the 1% monthly tax on excess TFSA, RRSP and FHSA contributions works, the $2,000 RRSP buffer, worked examples, the forms to file and how to ask the CRA for a waiver.
Worked Calculations and Checklists
Why a TFSA and an RRSP give the same result when your tax rate is the same now and later, worked examples at different retirement rates, the 2026 TFSA limit and room rules.
