# RRSP Withdrawal Tax: Withheld vs Real Tax

> Learn how much tax the bank withholds when you cash out an RRSP, then compare it with the real tax you owe on your return in 2026

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 |

These are the rates on the CRA's [tax rates on RRSP withdrawals](https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/rrsps-related-plans/making-withdrawals/tax-rates-on-withdrawals.html) page.

## 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. The CRA says as much itself:

The tax that was withheld may not always be enough to account for the tax you owe at your tax bracket.

Tax rates on withdrawals, [canada.ca](https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/rrsps-related-plans/making-withdrawals/tax-rates-on-withdrawals.html)

## 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%.

Take Sam, an Ontario electrician on $60,000, who pulls $4,000 out for a roof repair. The bank sends $3,600 and thinks the matter is closed. In April the taxman wants another $786. Withdrawals are cheapest in a year when your other income is low, so someone between jobs or on leave pays much less than a full-time earner does.

## 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, and for withdrawals made from 2026 to 2028 the repayments start in the fifth year after the withdrawal, per the CRA's page on [the Home Buyers' Plan](https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/rrsps-related-plans/what-home-buyers-plan.html). 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 works a little differently. The federal part is in the table above, and Revenu Quebec requires a flat 14% on top for a single payment, which makes the combined holdback 19%, 24% or 29% depending on size. On a $10,000 withdrawal that's $1,000 federal plus $1,400 provincial, $2,400 in all. Money moved straight into another registered plan isn't withheld on.

## 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](https://tax-services.ca/calculators/rrsp-retirement/rrsp-calculator). Pension years are a different case, and the [retirement income tax calculator](https://tax-services.ca/calculators/rrsp-retirement/retirement-income-tax) adds CPP, OAS and RRIF payments together. For your whole return, use the [income tax calculator](https://tax-services.ca/calculators/income-tax/income-tax-calculator).

## The sources behind this page

Withholding rates come from the federal tables for registered plan payments, and the Quebec provincial rate from Revenu Quebec's source-deduction guidance for employers and payers. 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.

---
Source: https://tax-services.ca/calculators/rrsp-retirement/rrsp-withdrawal-tax
Last updated: 2026-10-10
Independent information site. Not affiliated with the CRA. No services, no guarantee of accuracy. See https://tax-services.ca/disclaimer