RRSP Withdrawal Tax Calculator

How RRSP withdrawals are taxed

An RRSP withdrawal is ordinary income. Your bank withholds a flat percentage when it pays you, and it issues a T4RSP slip: the withdrawal (box 22) goes on line 12900 of your return and the tax withheld (box 30) on line 43700. The real tax is set when you file, at your marginal rate, so the withholding is only a down payment.

The 2026 examples below are for a $20,000 withdrawal in Ontario. The bank withholds 30% ($6,000) in all three cases, but the final tax depends on the rest of your income.

Why splitting a withdrawal does not cut the tax

The withholding rate depends on the size of each withdrawal: 10% up to $5,000, 20% from $5,000 to $15,000 and 30% over $15,000. Taking $20,000 as 4 withdrawals of $5,000 reduces the withholding to $2,000, but the income on your return is still $20,000.

With a $95,000 salary, that income costs $6,377 in Ontario, so the split leaves $4,377 to pay in April. The CRA warns that the tax withheld may not be enough for your tax bracket. If you split withdrawals, set the difference aside or ask the institution to withhold more.

Quebec and non-resident withholding

For RRSP funds held in Quebec, the federal withholding is 5%, 10% or 15%, and the CRA notes that Quebec provincial tax is withheld as well. The withdrawal is then reported on both your federal T1 and your Quebec TP-1 return.

If you have left Canada, the withdrawal is not taxed at these rates. The CRA says withholding for non-residents is 25% unless a tax treaty reduces it.

Withdrawals that are not taxed: HBP and LLP

Two programs let you take money out tax-free and pay it back later. Under the Home Buyers' Plan, first-time buyers can withdraw up to $60,000 with no tax withheld. Under the Lifelong Learning Plan (LLP), you can withdraw up to $10,000 a year and $20,000 in total to pay for full-time training or education for you or your spouse.

LLP repayments are 1/10 of the amount withdrawn each year, starting no later than the fifth year after your first withdrawal. HBP repayments are spread over 15 years. In both cases you designate the repayment on Schedule 7, it is not a deductible contribution, and any amount you fail to repay is added to your income for that year, where it is taxed like a normal withdrawal.

Converting to a RRIF at 71

Your RRSP must be converted by the end of the year you turn 71, usually to a registered retirement income fund (RRIF). Starting the year after you set up the RRIF, you must take a yearly minimum based on your age at the start of the year. You can elect to use your spouse's age instead, which lowers the minimum if they are younger.

RRIF income goes on line 11500 if you were 65 or older at year-end (or received it because your spouse died), and on line 13000 otherwise. At 65 it qualifies for the pension income amount, and you can allocate up to 50% to your spouse with pension income splitting (Form T1032). A lump-sum RRSP withdrawal does not qualify for splitting, which is one reason retirees often convert to a RRIF before 71.

Benefits and clawbacks to check before withdrawing

A withdrawal raises your net income, and many benefits are income-tested. Check the knock-on effects before choosing the year and the amount:

• OAS recovery tax: 15% of net income above $95,323 for 2026 income is clawed back from Old Age Security.
• Canada child benefit and the GST/HST credit (now the Canada Groceries and Essentials Benefit) are recalculated each July from the previous year's family net income.
• Spousal RRSP: a withdrawal within the attribution period is taxed to the contributing spouse (Form T2205).
• Over-contributions: with Form T3012A, unused contributions can be withdrawn without tax withheld, and you claim an offsetting deduction for the amount.