How much withholding tax will my RRIF administrator deduct from my withdrawal?

There is no withholding tax deducted from the required annual minimum withdrawal, but for withdrawal amounts that exceed your required minimum payment they are subject to withholding tax deductions.

The amount of withholding income tax is based upon the size of your withdrawal. This is so that you are paying the CRA a level of tax that is proportional to the amount withdrawn and included as taxable income in you current income tax return.

You should never assume that the amount of withholding tax deducted from your withdrawal is sufficient to cover the resulting income tax owing. The withholding deducted may not be sufficient to cover the tax you owe at your income tax bracket. You may have to pay additional income tax when you complete and file your annual income tax return.

Below is a reference chart with the withdrawal thresholds and the required level of withholding tax to be deducted:

Amounts Withdrawn

Above the Annual

Minimum Payment

 CRA Withholding Tax Deducted Combined CRA & Quebec Withholding Tax
Up to $5,000 10% Withholding Tax 21% Withholding Tax
$5,000 to $15,000 20% Withholding Tax 26% Withholding Tax
Amounts over $15,000 30% Withholding Tax 31% Withholding Tax

 

Note: In Quebec the provincial withholding rate is 16% added to the CRA withholding tax of 5%, 10% and 15% on withdrawals of under $5,000, $5,000 to $15,000 and over $15,000, respectively.

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