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Canada withholding tax comes in two very different kinds. If you’re a non-resident getting certain Canadian income, the standard Part XIII rate is 25% unless the law or a treaty lowers it. If you live here and cash out an RRSP, the bank holds back 10%, 20% or 30% up front, depending on the size of the withdrawal.
What is Part XIII tax?
Part XIII of the Income Tax Act taxes certain amounts that Canadian payers send to non-residents. The CRA’s rates page says non-residents pay 25% on amounts taxable under Part XIII. The payer holds that money back, so the recipient sees a reduced payment.
Two things can lower the 25%. One is a provision of the Act itself. The other is a tax treaty between Canada and the recipient’s country of residence. The CRA’s Information Circular IC76-12R8 (dated January 12, 2022) explains how to work out treaty rates and who counts as the beneficial owner of the payment. It doesn’t hand you a neat table by country, so the treaty text or the CRA’s Part XIII tax calculator is where the actual number lives.
One narrow exception is on the rates page: 23% applies to gross amounts paid for acting services in Canada by a non-resident actor.
What if there’s a tax treaty?
Then the rate can be lower, but the recipient has to show it qualifies. The CRA’s circular describes documentation for that, and forms NR301, NR302 and NR303 are the ones it names.
We won’t list treaty rates here. They differ by country and by type of payment, and the safe move is to read the treaty itself. Here’s a quick way to see what a rate change means for a $10,000 payment, using rates that are purely for illustration.
| Rate applied | Withheld from $10,000 | Recipient gets |
|---|---|---|
| 25% (standard) | $2,500 | $7,500 |
| 15% (example only) | $1,500 | $8,500 |
| 10% (example only) | $1,000 | $9,000 |
How does RRSP withholding tax work?
For residents, withholding on RRSP withdrawals depends on the amount. Outside Quebec it’s 10% up to $5,000, 20% from $5,001 to $15,000 and 30% above $15,000. In Quebec the federal part is 5%, 10% and 15%, and there’s provincial withholding on top through the financial institution. A non-resident who withdraws is held at 25% unless a treaty reduces it.
Withholding is only a deposit. The withdrawal is added to your income for the year and taxed at your ordinary rates, so the two numbers rarely match.
A worked example with $10,000
Say you live in Ontario, earn $60,000 and pull $10,000 out of your RRSP. The bank withholds 20%, which is $2,000, and pays you $8,000. The real income tax on that extra $10,000 is $2,965 by our calculator, so you’ll owe another $965 when you file. Withdraw $3,000 instead and the bank holds $300, while the real tax is about $889.50, which leaves you a little short again.
So a small withdrawal can bring a bill too. You can test your own numbers in the RRSP withdrawal tax calculator. To see how the extra income changes your rate, use the marginal tax rate calculator.
What about withholding from your pay?
Employers also withhold income tax, CPP and EI from every paycheque, and that’s a third kind of withholding, worked out from payroll tables. The payroll deductions calculator gives an estimate of what comes off. It’s a good check on a pay stub that looks wrong.
Mistakes people make
Assuming 25% applies to every payment abroad is the first one. It’s the default, but treaty and Act exceptions are common, and the recipient needs the right paperwork before the rate drops. The second is treating the RRSP withholding as your final tax. It isn’t. The third is guessing. If you’re the one paying someone abroad, ask the CRA before you pick a rate.
We couldn’t confirm on the pages we read which payment types are covered, when the remittance is due or what penalties apply. Look those up in the CRA’s guide T4061 before you act.
Where the numbers come from
The 25% and 23% rates and the reference to IC76-12R8 come from the CRA’s Part XIII pages, and the RRSP withholding amounts from the CRA page on RRSP withdrawals, all checked on 30 September 2026. The example uses 2026 federal and Ontario rates from our calculator. This site isn’t linked to the CRA or any government body.
Frequently asked questions
What is the standard withholding tax rate for non-residents?
The CRA says non-residents pay 25% on amounts taxable under Part XIII, unless the Act or a tax treaty reduces the rate.
How do I claim a reduced treaty rate?
The recipient has to show it qualifies. The CRA circular names forms NR301, NR302 and NR303 for that.
How much is withheld on an RRSP withdrawal?
Outside Quebec, 10% up to $5,000, 20% from $5,001 to $15,000 and 30% above $15,000. A non-resident is held at 25% unless a treaty reduces it.
Is the amount withheld my final tax?
No. The withdrawal is added to your income. On $10,000 with $60,000 of other income in Ontario, our calculator shows $2,965 of tax against $2,000 withheld.
Where can I find treaty rates?
In the treaty text and the CRA's Part XIII tax calculator. Information Circular IC76-12R8 explains how to use them but has no country table.
- How Canadian income tax works: brackets and credits
How federal and provincial Canadian income tax stack up, what marginal and average rates mean, and how credits and deductions change your bill
Information only. This page is general information, not tax, legal or accounting advice. Tax-Services.ca is an independent publisher: we don't prepare or file tax returns or offer tax services, and we have no connection with the CRA, Revenu Québec, any government or any company named on this page. Check the figures that matter with an official source or a qualified professional.