Cash out $15,000 from an RRSP and the bank holds back 20%, or $3,000, before you see a cent. For someone with $60,000 of other income in Ontario the real tax is $4,597.50, so $1,597.50 is still due when you file. Enter your withdrawal below and you’ll see both numbers.
How much does the bank hold back?
Outside Quebec the rate depends on the size of a single payment, and it applies to the whole amount. Think of it as a down payment on your tax, not the final bill. Quebec residents get a federal part withheld plus a separate provincial part.
| Single withdrawal | Withheld outside Quebec | Federal part in Quebec |
|---|---|---|
| Up to $5,000 | 10% | 5% |
| $5,001 to $15,000 | 20% | 10% |
| Over $15,000 | 30% | 15% |
| Non-resident of Canada | 25%, unless a treaty lowers it | Not applicable |
Why is my real tax different from what was withheld?
The withdrawal gets added to your other income for the year and taxed at your normal rates. The total can land above or below what the bank kept. A small withdrawal on top of a decent salary usually leaves a bill, since 10% sits well under your true rate.
What do three withdrawals look like?
Here are three cases with $60,000 of other income in Ontario.
- $4,000: $400 withheld, real tax $1,186, so $786 more to pay.
- $15,000: $3,000 withheld, real tax $4,597.50, so $1,597.50 more to pay.
- $40,000: $12,000 withheld at 30%, real tax $12,054.84, so only $54.84 more to pay.
A big withdrawal is nearly covered at source. The small ones leave the nasty surprise. Set the difference aside before you spend the cash, because the $15,000 withdrawal costs about 31% of its value in real tax, while the bank held back only 20%.
Can I avoid the tax by splitting the withdrawal?
No. Several small withdrawals all land on the same return, so the final tax doesn’t shrink. Money taken under the Home Buyers’ Plan isn’t taxed if you repay it on schedule. That plan allows up to $60,000, repaid over 15 years. The Lifelong Learning Plan works the same way, with $10,000 a year and $20,000 in total. It doesn’t separate plan withdrawals: the calculator treats every withdrawal as ordinary taxable income, so leave those plan withdrawals out of the amount you type.
Quebec needs a caution. The federal part of the withholding is confirmed, but the 14% provincial part used here comes from secondary sources and we haven’t verified it. Treat a Quebec result as an estimate. A call to your institution will settle the rate.
What should I look at before taking money out?
You’ll want to see first what the deposit saved you, using the RRSP tax savings calculator. Pension years are a different case, and the retirement income tax calculator adds CPP, OAS and RRIF payments together. For your whole return, use the income tax calculator.
Where the numbers come from
Withholding rates come from the federal tables for registered plan payments. Income tax uses the 2026 federal and provincial rates built into the site. We have no connection with any government body, so confirm details with your financial institution.
Frequently asked questions
How much tax is withheld when I cash out an RRSP?
Outside Quebec it's 10% up to $5,000, 20% up to $15,000 and 30% above that. The rate applies to the whole payment.
Is the withheld amount the final tax?
No, it's only an advance. The real tax comes from adding the withdrawal to your income and applying your rates.
Why do I owe more after tax was withheld?
A small withdrawal is held back at a low rate, often below your top rate. You pay the gap when you file.
Do Home Buyers' Plan withdrawals count as income?
Not if you repay them on schedule. The limit is $60,000, repaid over 15 years.
What is withheld if I'm not a resident?
25%, unless a tax treaty lowers it.
Sources and updates
Updated: . How we check rates · Editorial team · Updates
Estimate only. These figures are a planning estimate, not tax, legal or accounting advice. Tax-Services.ca is an independent publisher: we don't prepare or file tax returns, and we don't offer tax, legal or accounting services. We have no connection with the Canada Revenue Agency, Revenu Québec or any provincial government. Your real amounts depend on details this tool cannot see, so confirm them with an official source or a qualified professional before you act.