Withdraw $40,000 from your RRSP in 2026 and CRA withholds $12,000 immediately (30%) — or $11,600 (29%) if you're in Quebec. Your final tax bill depends on your marginal rate (other income + province).
Withheld at source (outside Quebec)
$12,000
30% of $40,000 — you receive $28,000 cash
Withheld at source (Quebec)
$11,600
29% combined fed + QC — you receive $28,400 cash
CRA Withholding Tiers (why 30%?)
Withdrawal amount
Outside Quebec
Quebec (fed + prov)
Up to $5,000
10%
19% (5% + 14%)
$5,001 – $15,000
20%
24% (10% + 14%)
Over $15,000
30%
29% (15% + 14%)
Source: CRA S3-F10-C3 and Regulation 103. Withholding is a prepayment — your final tax is your marginal rate, reconciled on your T1.
Per-Province Final Tax (if RRSP is your only income for 2026)
Pure withdrawal scenario — e.g. retiree with no employment or CPP/OAS yet. Assumes 2026 basic personal amount (BPA) shelters the first ~$16,452 federally.
Province
Withheld
Actual tax
Effective rate
Refund / (Owing)
Net in hand
Ontario
$12,000
$5,111
12.8%
$6,889.22
$34,889
British Columbia
$12,000
$4,620
11.6%
$7,379.67
$35,380
Alberta
$12,000
$4,675
11.7%
$7,324.80
$35,325
Quebec
$11,600
$5,699
14.2%
$5,900.52
$34,301
Manitoba
$12,000
$5,912
14.8%
$6,087.52
$34,088
Saskatchewan
$12,000
$5,357
13.4%
$6,643.28
$34,643
Nova Scotia
$12,000
$6,319
15.8%
$5,681.39
$33,681
New Brunswick
$12,000
$5,772
14.4%
$6,227.70
$34,228
Newfoundland and Labrador
$12,000
$5,638
14.1%
$6,362.46
$34,362
Prince Edward Island
$12,000
$5,913
14.8%
$6,087.22
$34,087
Northwest Territories
$12,000
$4,583
11.5%
$7,416.96
$35,417
Yukon
$12,000
$4,804
12.0%
$7,196.21
$35,196
Nunavut
$12,000
$4,110
10.3%
$7,889.64
$35,890
With Other Income (Ontario 2026)
What a $40,000 withdrawal actually costs when stacked on top of your existing income. Effective rate rises as your marginal rate climbs.
How much tax do you pay on a $40,000 RRSP withdrawal?
CRA withholds 30% at source outside Quebec (29% in Quebec) — that's $12,000 on $40,000. At filing you settle up at your marginal rate. With no other income in Ontario 2026, actual tax is $5,111 (12.8% effective) and you get a refund of $6,889.
How much is withheld on a $40,000 RRSP withdrawal?
CRA withholding tax on $40,000: $12,000 (30%) in every province except Quebec, and $11,600 (29%) combined federal + provincial in Quebec. Withholding tiers are 10%/20%/30% on ≤$5k / $5,001–$15k / $15k+, doubled to 19%/24%/29% in Quebec.
Is a $40,000 RRSP withdrawal taxable income?
Yes. The full $40,000 is added to your taxable income for the year and taxed at your combined federal + provincial marginal rate. The 30% withholding is a deposit against that tax, not the final tax owed — if your marginal rate is higher you'll owe more; if lower you'll get a refund.
Does it matter how I split a $40,000 withdrawal?
Yes — withholding tiers apply per withdrawal, so splitting $40,000 into several ≤$5,000 withdrawals drops the immediate withholding to 10% each (19% in Quebec). CRA is wise to this: they may apply a higher rate if withdrawals are clearly coordinated to reduce withholding. Final tax at filing is identical regardless of splits — only your cash flow before filing changes.
