RRSP Withholding Taxes
Financial institutions are required to withhold taxes on all cash withdrawals from an RRSP.
| Where do you live? | Alberta |
|
75,000
Taxable Income
Enter the taxable income amount from line 260 of your personal income tax return. |
|
10,000
|
If you withdraw $10,000, you will only actually receive $8,000 because $2,000 in taxes will be withheld.
Since you must report this withdrawal as income when you file your income tax return, you will owe an additional in taxes.
| Net Withdrawal Amount | |
| Total amount withdrawn from RRSP | $10,000 |
| Less tax withheld at 20% | $2,000 |
| Equals net withdrawal | $8,000 |
Since you must report this withdrawal as income when you file your income tax return, you will owe an additional in taxes.
| Additional Taxes Owing | ||
| Tax on of income (including the withdrawal) | A | $18,282 |
| Tax on of income without the withdrawal | B | $15,204 |
| Tax on withdrawal | A-B | $3,078 |
| Less taxes already withheld | $2,000 | |
| Equals tax owing | $1,078 |
| RRSP Withholding Tax Rates |
| The withholding tax varies depending on the amount withdrawn and your province of residence. |
| Outside | ||
| Withdrawal Amount | Quebec | Quebec |
| Up to $5,000 | 10.00% | 20.00% |
| $5,001 to $15,000 | 20.00% | 25.00% |
| $15,001 & over | 30.00% | 30.00% |
Assumptions
Calculations use marginal tax rates as of January 2020. Rates take all federal and provincial taxes and surtaxes into account and the basic personal tax credit.
Disclaimer
Calculations use marginal tax rates as of January 2020. Rates take all federal and provincial taxes and surtaxes into account and the basic personal tax credit.
Disclaimer
