Example
You put in $10,000 and your tax bracket is 30%. You save $3,000 in tax this year. You'll pay tax later, when you withdraw — but most people are in a lower bracket by then.
CRA source: Income Tax Folio S1-F4-C2
Disclaimer: Plain-language summary for educational purposes. Canada Tax Planner is software, not a tax professional. Consult a CPA before filing decisions involving incorporation, multi-province residency, or amounts above $5,000. Not affiliated with the Canada Revenue Agency.