RRSP Withholding Taxes

Financial institutions are required to withhold taxes on all cash withdrawals from an RRSP.
Where do you live? Alberta
Taxable income
75,000
Taxable Income

Enter the taxable income amount from line 260 of your personal income tax return.
Amount withdrawn from RRSP
10,000


If you withdraw $10,000, you will only actually receive $8,000 because $2,000 in taxes will be withheld.

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Total amount withdrawn from RRSP$10,000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 withdrawalB$15,204
Tax on withdrawalA-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The withholding tax varies depending on the amount withdrawn and your province of residence.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 AmountQuebecQuebec
Up to $5,00010.00%20.00%
$5,001 to $15,00020.00%25.00%
$15,001 & over30.00%30.00%




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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.

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