Savings · RRSP
RRSP Withdrawal Tax Calculator
How much tax comes off an RRSP withdrawal now, and what you really owe when you file.
Your withdrawal
How RRSP withdrawals are taxed
When you take money out of an RRSP, your bank holds back tax right away: 10% on up to $5,000, 20% on $5,001 to $15,000 and 30% over $15,000 (in Quebec, 5%, 10% or 15% federal plus 14% Quebec tax). That's only a prepayment.
The withdrawal is added to your income for the year, so the real tax is your marginal rate on it. If that's more than was withheld, you pay the difference when you file; if less, you get it back. Splitting a large withdrawal into amounts under $5,000 lowers the withholding but not the final tax.
Withdrawals for a first home (Home Buyers’ Plan) or school (Lifelong Learning Plan) are not taxed if you repay them. To see the refund from putting money in instead, use the RRSP calculator.
Sources: CRA: tax rates on withdrawals
Frequently asked questions
How much tax do I pay on a $10,000 RRSP withdrawal?
Your bank withholds 20% ($2,000). The final tax depends on your other income and province: with a $60,000 salary in Ontario it's roughly $3,000, so about $1,000 more is due when you file.
What is the withholding tax on RRSP withdrawals?
10% on withdrawals up to $5,000, 20% from $5,001 to $15,000 and 30% over $15,000. In Quebec the federal rates are 5%, 10% and 15%, plus 14% Quebec tax.
Is it better to withdraw RRSP in small amounts?
Small withdrawals lower the tax held back now, but not the final tax: the total is added to your income for the year. Spreading withdrawals over several low-income years is what actually cuts the tax.
Do I lose RRSP contribution room when I withdraw?
Yes. Regular withdrawals don't give the room back, unlike a TFSA. Home Buyers' Plan and Lifelong Learning Plan withdrawals are repaid instead.
Keep growing your savings
Advertisement