RRSP withdrawal tax 2026: how much will you really pay?
Enter your province, the amount you take out and your other income for the year: the calculator shows the tax your institution withholds and the tax you actually owe on the withdrawal.
Actual tax on the withdrawal
$1,950
Withholding: 20%. The balance is settled on your return.
| Withholding | $2,000 |
| Total tax due | $1,950 |
| Extra to pay in the spring | $0 |
| Average rate on the withdrawal | 19.5% |
An RRSP withdrawal does not give back contribution room, unlike a TFSA withdrawal.
Prepared by Radif Partners · How we calculate · limits and tax tables read on canada.ca · estimates only, not a notice of assessment
An RRSP withdrawal is taxed twice over, in amounts that do not match. Your institution first withholds tax at source: 10% up to $5,000, 20% up to $15,000 and 30% above that, or 5%, 10% and 15% federally in Quebec, plus Quebec withholding. The withdrawal is then added to your income for the year, and the real tax is worked out at your marginal rate on your return. In Ontario, with $45,000 of other income, a $20,000 withdrawal has $6,000 withheld, while the 2026 tax owed on it is $4,686. Splitting the withdrawal into small amounts lowers the withholding, not the final tax: the balance is due in the spring. A non-resident has 25% withheld unless a tax treaty sets a lower rate. The contribution room you used does not come back after a withdrawal.
Withholding rates for 2026
When you take money out of an RRSP, the financial institution withholds tax before paying you the rest. The rate depends on where you live and on the amount withdrawn, as set out on the CRA page on withdrawal tax rates. In Quebec the federal share is cut in half, and the institution also withholds Quebec tax under Revenu Québec rules, which the calculator does not estimate.
| Size of each withdrawal | Outside Quebec | Quebec (federal share) |
|---|---|---|
| Up to $5,000 | 10% | 5% |
| $5,000 to $15,000 | 20% | 10% |
| Over $15,000 | 30% | 15% |
These rates are only a down payment. They know nothing about your salary or your other withdrawals in the year. In Quebec, a $20,000 withdrawal has 15% federal tax withheld, or $3,000, with Quebec withholding on top.
The real tax is settled on your return
The amount you withdraw appears on a slip and is added to your income for the year, just like wages. It is taxed at the rates of the brackets it falls into, federal and provincial combined, using the 2026 rates. The tax withheld is then credited to you: if it is more than the tax owed, you get the difference back; if not, you pay the balance in the spring. The table follows a $20,000 withdrawal in Ontario, with $6,000 withheld, at six levels of other income.
| Other income | Withheld | Real tax | Gap |
|---|---|---|---|
| $0 | $6,000 | $851 | -$5,149 |
| $20,000 | $6,000 | $3,810 | -$2,190 |
| $45,000 | $6,000 | $4,686 | -$1,314 |
| $70,000 | $6,000 | $5,930 | -$70 |
| $100,000 | $6,000 | $7,082 | $1,082 |
| $140,000 | $6,000 | $8,838 | $2,838 |
With no other income, the withdrawal is sheltered by the basic personal amounts and the lowest bracket: the real tax is only $851, and nearly all the withholding comes back. With $140,000 of other income it climbs to $8,838, far above the $6,000 withheld. It is the same mechanism as a contribution, run backwards: the rate that matters is your marginal tax rate.
The rate your withdrawal will be taxed at
2026 combined marginal rate, Ontario
19.1%
| Federal share | 14.0% |
| Provincial share | 5.1% |
| Total tax on this income | $5,613 |
| Average rate | 12.5% |
Splitting withdrawals does not cut the tax
Withholding is set one withdrawal at a time. Four withdrawals of $5,000 each stay in the lowest band and have only 10% withheld, $2,000 in all, instead of $6,000 on a single $20,000 withdrawal. The final tax does not move by a dollar, because it depends on the total taken out in the year. With $45,000 of other income in Ontario, $2,686 is still owing when you file. Splitting only keeps more cash in your hands now, so set the balance aside.
What can genuinely lower the tax is spreading withdrawals over several calendar years, so that each one lands in a lower bracket. Taking $10,000 in December and $10,000 in January means two incomes in two different years.
What a withdrawal costs you beyond tax
An RRSP withdrawal does not restore contribution room. The room used when the money went in is spent for good, whereas a TFSA withdrawal comes back as room on the next January 1. The withdrawal also raises your net income, which can reduce income-tested benefits. In retirement it counts for Old Age Security and the Guaranteed Income Supplement; see RRSP, OAS and GIS.
Some RRSPs are locked in because they come from an employer pension plan, and you generally cannot withdraw from them. A direct transfer from one RRSP to another, handled by the institutions, is not a withdrawal and has no tax withheld.
Withdrawals that are not taxed
Two programs let you take money out without adding it to income: the Home Buyers’ Plan, to buy or build a qualifying home, and the Lifelong Learning Plan, to pay for training or education. Under the LLP, the institution does not even withhold tax. The amounts must be repaid on a set schedule, and a missed payment is added to income for that year. For an RRSP held by a spouse or common-law partner, the withdrawal may be taxed to the contributor instead of the holder; see spousal RRSP.
Non-residents
Someone who has left Canada has 25% withheld on withdrawals, unless a tax treaty between Canada and their country of residence sets a lower rate. The three-band rule does not apply to them.