As a member of the Canadian Armed Forces, staying on top of tax updates isn’t just about meeting obligations—it’s about maximizing opportunities. With 2026 bringing several important changes to the tax rules, it’s the perfect time to check in with a SISIP Advisor to see how they could impact your ability to achieve your financial goals.
$16,452
The Updated Basic Personal Amount
In 2026, the Basic Personal Amount (BPA)—the income every Canadian can earn tax-free—will increase to $16,452, up from $16,129 in 2025. This adjustment means slightly more of your income will be protected from federal taxes. For CAF members, this translates to more take-home pay, providing a small but welcome boost to your budget.
14%
A Lower First Tax Bracket
One of the biggest tax changes for 2026 is a reduction in the lowest federal income tax rate. Starting in 2026, the lowest federal marginal tax rate will be 14%, down from 15% in previous years. This means that the first portion of your taxable income (up to roughly $58,500) will be taxed at a lower rate than before, giving many Canadians a modest tax savings and slightly more take-home pay.
$33,810
The New RRSP Contribution Limit
In 2026, the maximum Registered Retirement Savings Plan (RRSP) contribution amount is $33,810. Keep in mind that your personal contribution room is calculated as 18% of your earned income from the previous year minus any pension adjustments, which means that anyone who participates in the CAF pension has a lower limit.
Nonetheless, maximizing your RRSP contributions is a powerful way to save for the future while reducing your taxable income today. Even smaller contributions can make a big difference over time, thanks to the magic of compounding.
Note: The deadline to contribute is Monday, March 2, 2026.
$7,000
The TFSA Contribution Limit
For 2026, the Tax-Free Savings Account (TFSA) contribution limit remains unchanged at $7,000, the same as last year. While this isn’t an increase, it still represents a powerful opportunity to grow your savings tax-free.
For CAF members, TFSAs can be especially useful for short- and medium-term goals, such as emergency funds, major purchases, or future relocation, since withdrawals are tax-free. They’re also great in retirement, as they are the only source of tax-free income. If you didn’t use all of your contribution room in previous years, you can also carry that unused space forward.
$8,000
The FHSA Contribution Limit
The First Home Savings Account (FHSA) allows eligible Canadians to contribute up to $8,000 per year, with a lifetime limit of $40,000, toward the purchase of their first home. Contributions are tax-deductible (like an RRSP), and withdrawals for a qualifying home purchase are tax-free (like a TFSA). Contribution room only starts to accumulate once you open an account, so even opening one and making a small contribution now can create valuable flexibility down the road.
For CAF members, this can be an especially useful tool if you’re planning to buy a home in the future but aren’t sure where or when you’ll settle. It offers flexibility, tax advantages, and a structured way to save for a major milestone, even if that milestone is still a few postings away.
$74,600
The New CPP Maximum Pensionable Earnings
The Year’s Maximum Pensionable Earnings (YMPE) under the Canada Pension Plan (CPP) will rise to $74,600 in 2026, up from $71,300. While this means higher contributions from your pay, it also enhances your future CPP retirement benefits. This is especially important for military members planning for life after service.
$68,900
The New EI Maximum Insurable Earnings
Employment Insurance (EI) maximum insurable earnings will increase to $68,900 in 2026. The maximum employee contribution will now be $1,123, while employers will contribute $1,572. If you have any self-employed or secondary income, these changes could affect your planning.
If you have any questions or would like tailored advice, please reach out to your local SISIP Advisor. With the right strategies, you can navigate these changes and get further ahead financially in 2026.
