Quick answer: CRA withholds federal tax on RRSP and excess RRIF withdrawals at 10% (up to $5,000), 20% ($5,000.01-$15,000), and 30% (over $15,000) per single transaction. Quebec residents have a lower federal portion plus 14% Quebec provincial withholding on top. RRIF minimum withdrawals and HBP/LLP withdrawals are exempt from withholding.
What this means: Withholding is a prepayment of tax, not the final amount. A $20,000 single RRSP withdrawal sees $6,000 withheld at source (30%), and the full $20,000 is added to taxable income at filing. If your marginal rate is below 30%, you get the difference back as a refund; above 30%, you owe more.
What to do next: See the RRIF minimum withdrawal amount (no withholding applies). RRIF minimum calculator →
2026 RRSP withholding tax rates
Withholding on RRSP withdrawals is set by Income Tax Regulation s. 103. The rates apply per single withdrawal transaction, not by cumulative year-to-date:
| Single withdrawal | Outside Quebec (federal) | Quebec resident (federal portion) | Quebec resident (Quebec provincial) | Quebec total at source |
|---|---|---|---|---|
| Up to $5,000 | 10% | 5% | 14% | 19% |
| $5,000.01 to $15,000 | 20% | 10% | 14% | 24% |
| Over $15,000 | 30% | 15% | 14% | 29% |
The rate is determined by the size of each transaction, not the total withdrawn over the year. Multiple smaller withdrawals attract the lower rate even when the cumulative total is high. This affects cash-flow timing, but it does not reduce the final tax owing at filing.
Withholding is a prepayment, not the final tax
The full RRSP withdrawal is added to taxable income on your T1 and taxed at your marginal rate. The withheld amount is credited against the tax bill. Three outcomes:
- Marginal rate > withholding rate. You owe more at filing.
- Marginal rate = withholding rate. No further tax owed; no refund.
- Marginal rate < withholding rate. You get the excess back as a refund.
Worked examples
Example 1: Single $10,000 withdrawal, Ontario resident. The institution withholds 20% ($2,000). Cash received: $8,000. The full $10,000 is added to taxable income for the year. If the holder’s total income lands in the 30% combined marginal bracket, total tax on the $10,000 is $3,000, so $1,000 is still owed at filing.
Example 2: Three $5,000 withdrawals across the year, Ontario resident. Each transaction is at the 10% rate, so total withholding is $1,500 (vs. $3,000 if taken as a single $15,000 withdrawal). The full $15,000 is added to taxable income. Final tax owed depends on marginal rate; the lower withholding means a smaller prepayment but the same final tax.
Example 3: $20,000 single withdrawal, Quebec resident. Federal withholding is 15% ($3,000); Quebec withholding is 14% ($2,800). Total withheld: $5,800. Cash received: $14,200. The full $20,000 is added to taxable income on both the federal T1 and the Quebec TP-1. Final tax owed depends on combined federal + Quebec marginal rate.
Example 4: Low-income retiree. A retiree with $20,000 of other income withdraws $10,000 (20% federal withholding = $2,000). The combined marginal rate at $30,000 is around 20% (after the basic personal amount), so actual tax owed on the $10,000 is roughly $2,000 — net result close to zero at filing.
Quebec rules: lower federal withholding plus 14% Quebec
For Quebec residents, the financial institution withholds the federal portion at a reduced rate (5% / 10% / 15% instead of 10% / 20% / 30%) because Quebec administers its own provincial income tax and adds its own withholding. The Quebec provincial portion is a flat 14% per Revenu Québec, regardless of withdrawal size. Combined source withholding for Quebec residents: 19%, 24%, 29% across the three tiers.
The full withdrawal is still reported on both the federal T1 and the Quebec TP-1 return. Final tax owing is calculated by both governments separately; the source withholding is credited against each respective return.
RRIF minimum withdrawals are exempt from withholding
The minimum required RRIF withdrawal for the year is paid without withholding tax. Only the excess over the minimum is subject to the standard rates. See RRIF minimum withdrawal rates 2026 for the prescribed-factor table and how to calculate the minimum dollar amount.
Example. A 72-year-old has a $400,000 RRIF on January 1, 2026. The 2026 minimum is 5.40% × $400,000 = $21,600 (no withholding). If the holder withdraws $30,000 total, the $8,400 above the minimum is subject to 30% withholding ($2,520), so cash received is $30,000 − $2,520 = $27,480.
HBP and LLP withdrawals are exempt with Form T1036 or T1006
RRSP withdrawals under the Home Buyers’ Plan (HBP) and Lifelong Learning Plan (LLP) are exempt from withholding tax, provided the correct form is filed with the financial institution before withdrawal:
- HBP withdrawals: Form T1036, Home Buyers’ Plan (HBP) Request to Withdraw Funds from an RRSP.
- LLP withdrawals: Form T1006, Designating an RRSP, a PRPP or an SPP Withdrawal as a Qualifying Withdrawal.
HBP and LLP withdrawals are also not included in taxable income on the T1; they are treated as a loan to be repaid over 15 (HBP) or 10 (LLP) years. Missed repayments are added to taxable income in the year missed.
Non-resident withholding
RRSP withdrawals by non-residents of Canada are subject to a 25% non-resident withholding tax under the default rule. Tax treaties reduce this rate for residents of treaty countries:
- U.S. residents: Periodic pension payments are withheld at 15% under the Canada-U.S. tax treaty. Lump-sum RRSP withdrawals remain at 25%.
- Other treaty countries: Rates vary; consult the relevant treaty.
Non-resident withholding is generally final — the non-resident does not file a Canadian T1 for the withdrawal unless they elect to file under section 217 of the Income Tax Act to recover excess withholding.
Strategic withdrawal timing
The withholding tiers create an incentive to split a planned withdrawal into multiple smaller transactions across the year — but the total tax owed at filing is the same. The real strategy levers:
- Time withdrawals to low-income years. A sabbatical, parental leave, or early-retirement gap can drop your marginal rate sharply.
- Pension-income splitting from age 65. Up to 50% of eligible pension income (which includes RRIF withdrawals from age 65) can be split with a spouse, reducing combined household tax.
- Match withdrawals to deductions. Year-end charitable donations, medical expenses, and unused tuition transfers can absorb some withdrawal income.
- Stay below OAS clawback thresholds. See OAS clawback threshold 2026 — large RRSP/RRIF withdrawals that push net world income past $95,323 (2026) cost 15% in OAS recovery tax on top of marginal tax.
Will the institution aggregate same-day withdrawals?
Some institutions combine multiple withdrawals made on the same day to determine the withholding rate (treating them as one transaction). Others apply the rate per individual transaction. CRA can also reassess if multiple withdrawals appear coordinated to avoid withholding tiers, though this is rarely enforced for legitimate retirement income drawdowns. Confirm the institution’s practice before timing multiple withdrawals.
Frequently asked questions
What is the RRSP withholding tax rate in 2026?
10% on amounts up to $5,000, 20% on $5,000.01 to $15,000, and 30% on amounts over $15,000 per single transaction (outside Quebec). Rates are statutory under Income Tax Regulation s. 103 and unchanged from prior years.
Does withholding apply to RRIF minimum withdrawals?
No. The RRIF minimum for the year is paid without source withholding. Only the excess above the minimum is subject to the standard rates.
Does withholding apply to HBP withdrawals?
No. HBP withdrawals are exempt from withholding when Form T1036 is filed with the institution before withdrawal. They are also not added to taxable income.
What withholding applies in Quebec?
Federal portion: 5% / 10% / 15% (lower than outside Quebec). Quebec provincial portion: flat 14%. Combined source withholding: 19% / 24% / 29% across the three tiers.
How can I reduce withholding on a large RRSP withdrawal?
Splitting the withdrawal into multiple sub-$5,000 transactions across the year keeps each at the 10% rate — but the total tax owed at filing is the same. The institution may also combine same-day withdrawals.