Unlike an RRSP, your TFSA contribution room has nothing to do with how much you earn. Every Canadian resident aged 18 or older accrues the same annual dollar amount of room, starting the later of 2009 (when the account launched) or the year they turned 18, and it keeps carrying forward indefinitely if you don't use it. That's why someone who has never contributed can suddenly have well over $100,000 of available room the first time they open an account.
The trade-off for tax-free growth is that contributions come from after-tax money, there's no deduction, no refund, nothing to claim on your T1. What you get instead is that every dollar of growth inside the account, and every dollar you eventually withdraw, is completely untaxed, at any income level, for life. That's the opposite mechanic to an RRSP, where the deduction happens up front and the tax bill arrives on withdrawal.
The part that trips people up is timing on withdrawals. Take money out of a TFSA and that room doesn't reappear until January 1 of the following year, layered on top of that year's new annual limit. Withdraw and immediately re-contribute the same amount in the same calendar year, without room to cover it, and the CRA treats it as an over-contribution, with a 1% per month penalty on the excess until it's cleared.
