Ask your company how much, if any, of your severance settlement qualifies as a "retiring allowance" under CRA rules. Part of it might be eligible for extra RRSP contribution room. There is a formula in CRA Guide to Registered Retirement Plans T-4040 - Chart 8.My company has paid out my banked vacation in a lump sum as part of my severance settlement. The payout amount is just over $100K (less than $50K net after all the deductions). How could I limit my taxable income for the year?