Dipping into your RRSP,
what does it cost?
Before dipping into your RRSP, see the real tax — not just the withholding — and the pitfalls to avoid.
How much do you keep?
Estimate the real tax on an RRSP withdrawal, beyond the upfront withholding.
Salary, pension, benefits… the gross amount, before tax. The withdrawal stacks on top: the more you already earn, the more it’s taxed. That’s why we need it.
The withholding isn’t enough. You’ll have to pay about $1,423 more when you file your return.
Timing changes everything
The higher your income for the year, the more the withdrawal is taxed. Withdrawing in a lower-earning year often costs a lot less.
Work more or dip into the RRSP?
For an equal gross amount, an RRSP withdrawal avoids the QPP/EI/QPIP contributions of a salary — but it draws on your savings and the tax you had deferred becomes due.
Worth keeping in mind
- Withholding tax is not the final tax: the withdrawal is re-taxed at your marginal rate (the tax on your last dollars earned).
- Withdrawn contribution room is lost forever (unlike the TFSA).
- The withdrawal boosts your income: it can reduce your income-based credits and benefits (family allowance, Old Age Security…).
- Exceptions: the HBP (Home Buyers’ Plan) and the LLP (Lifelong Learning Plan) aren’t taxed if they’re repaid according to the rules.
What this calculation is based on: sources and method
What this calculation includes
- 2026 withholding tax on the withdrawal (5/10/15% federal + 14% Québec)
- Real tax at your marginal rate (2026 federal and Québec brackets)
- Comparison of withholding vs. tax actually owed
Doesn't account for: Credits based on your situation (dependants, childcare, donations, medical expenses…) · Other income (investments, rental, benefits) and specific deductions · Marital status and income splitting.
Official sources
- Revenu Québec income tax brackets and source deductions (TP-1015.F), 2026
- Retraite Québec QPP and QPP2 contributions, 2026
- QPIP 2026 contribution rates
- Canada Revenue Agency federal tax and guide T4127, 2026
- CFFP — Université de Sherbrooke parameters of the Québec tax system
A withdrawal is not “free money”
The RRSP defers tax: on withdrawal, the tax you had saved becomes due. This tool helps you see the real cost so you can decide with full knowledge. It is not financial advice.
Frequently asked questions
Is the tax withheld on an RRSP withdrawal the final tax?
No, and it’s the most common pitfall. In Québec, your institution takes a withholding tax of 19% (withdrawal of $5,000 or less), 24% ($5,001 to $15,000) or 29% (more than $15,000). But that’s only a down payment. The withdrawal is added to your income for the year and taxed again at your marginal rate. If that rate is higher than the withholding, you’ll have to pay the difference when you file.
How much tax will I pay on an RRSP withdrawal?
As much as on regular income: the withdrawal is added to your other income and taxed at your combined marginal rate (federal + Québec), which ranges from about 26% to 53% depending on your total income for the year. The tool estimates this real amount based on your situation.
Is it better to withdraw in a year when I earn less?
Tax-wise, a withdrawal is taxed based on your total income for the year. The same amount withdrawn in a low-income year (for example, in early retirement or between two jobs) is therefore generally taxed at a lower rate than in a full-salary year. The tool shows you the gap. To make a decision, also consider your needs and consult a professional if needed.
Do I get my contribution room back after a withdrawal?
No. Unlike the TFSA, the RRSP contribution room you withdraw is lost permanently (except under the HBP for buying a home or the LLP for studies, which work like loans you pay back).
Can an RRSP withdrawal reduce my government benefits?
Yes. Because it increases your taxable income for the year, a withdrawal can reduce income-tested benefits and credits, such as the Family Allowance, Old Age Security or the solidarity tax credit. It’s an effect to consider before withdrawing a large amount.