RRSP Withdrawal Tax — How Much Tax Will You Pay?
Calculate withholding tax and income tax on RRSP withdrawals. Understand the tax impact of early RRSP withdrawals before retirement.
RRSP withdrawals are subject to immediate withholding tax plus additional income tax at filing. Withholding rates: 10% on amounts up to $5000 and 20% on $5001-$15000 and 30% above $15000. However the actual tax depends on your marginal rate. If your marginal rate is 40% and only 30% was withheld you owe an additional 10% at tax time. Early RRSP withdrawals permanently lose contribution room.
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Key Information
| Parameter | Details |
|---|---|
| Withholding (up to $5000) | 10% |
| Withholding ($5001-$15000) | 20% |
| Withholding (above $15000) | 30% |
| Contribution Room | Lost permanently on withdrawal |
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Use Calculator NowFrequently Asked Questions
How much tax on $20000 RRSP withdrawal?
Withholding tax: 30% = $6000 deducted immediately. You receive $14000. At tax time: $20000 is added to your income. If your marginal rate is 43% (Ontario at $80000 income) actual tax is $8600. Since $6000 was already withheld you owe an additional $2600 at filing. Total tax: $8600 on $20000 withdrawal.
When should I withdraw from RRSP?
Ideal scenarios: in retirement when your income and tax rate are lower. During a gap year or sabbatical with low income. Using the Home Buyers Plan ($35000 tax-free for first home). Using the Lifelong Learning Plan ($10000/year for education). Avoid withdrawing during high-income years as you lose the contribution room permanently.
RRSP withdrawal vs TFSA which first?
Always withdraw from TFSA first if you need cash. TFSA withdrawals are completely tax-free and the room restores next year. RRSP withdrawals are taxable and the room is lost forever. Use RRSP only after exhausting TFSA or during low-income years when the tax impact is minimal.
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Last updated: March 2026