2017 RRSP Withdrawal Income Tax Estimator

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Definitions:

Employment Income

Employment income includes amounts you receive as a salary, wages, commissions, bonuses, tips, gratuities, and honoraria. Employment income is usually shown in box 14 of your T4 slips.

Other Income 

For the purposes of this calculator, Other Income should include income from investments, rental properties, etc. It should include all income other than Employment and Eligible Pension income.

Eligible Pension Income 

Eligible pension income is generally the total of the following amounts received by the pensioner during the calendar year:

  • the taxable part of life annuity payments from a superannuation or pension fund or plan; and
  • if they are received as a result of the death of a spouse or common-law partner, or if the pensioner is 65 years of age or older at the end of the year:
    • annuity and registered retirement income fund (including life income fund) payments; and
    • registered retirement savings plan (RRSP) annuity payments.

For a more detailed list of eligible pension and annuity income, see the charts for line 314, Pension income amount:

Income Before RRSP Withdrawal

Total income equals the sum of your Employment Income, Other Income and Eligible Pension Income.

RRSP Withdrawal

This is the amount you have withdrawn, or plan to withdraw, from your RRSP or your spouse's or common-law partner's RRSP plan. This calculator assumes your withdrawal is made as a single withdrawal. If you make multiple withdrawals, then the amount of Withholding Tax Deducted may be different - but all other calculated numbers will be the same.

For more information, visit the RRSP Withdrawals section of our site.

Total Income

Net Income is simply your Income Before RRSP Withdrawal plus your RRSP Withdrawal for the tax year.

Income Taxes Payable Before Withdrawal

This is an estimate of the income taxes you will pay on your Income Before RRSP Withdrawal.

Income Taxes Payable After Withdrawal

This is an estimate of the income taxes you will pay on your Total Income, which includes your  RRSP Withdrawal.

Increased Taxes Payable Due to Withdrawal

This is an estimate of the income taxes you will pay on the amount of your RRSP Withdrawal.

Total RRSP Withdrawal Amount

This number is simply the amount you have requested to withdraw from your RRSP - it's the same as the amount you have entered as your RRSP Withdrawal.

Less Withholding Tax Deducted

When you make an RRSP withdrawal, the financial institution that administers your RRSP account is required to deduct withholding taxes from the amount you have asked to be withdrawn. The institution sends the withholding taxes to the Canada Revenue Agency. As a result, the amount of money you will receive out of your RRSP will be less than the amount you request.

For more information, go to the RRSP Withholding Taxes section of InvestingForMe.

Net RRSP Amount Received

This is the amount of money you will receive from the financial institution that administers your RRSP account. This amount is simply the amount of your RRSP Withdrawal minus the Less Withholding Tax Deducted amount.

Additional Income Tax Payable Next April or You Should Get A Refund Next April

This is an estimate of the additional income taxes you will be required to pay next April, when you file your annual income tax return. When you withdraw money from your RRSP, your financial institution is required to deduct and remit Withholding Taxes, but most of us will also pay additional income taxes when we file our income tax returns.

In addition, if you make an RRSP Withdrawal in a year when your taxable income is low, you may receive a refund next April because the amount of withholding taxes deducted and remitted by your financial institution was too large. Our calculator will estimate the amount of your April refund.

Aftertax Net Amount of Withdrawal

This is the amount of money you will have in your pocket, after all incomes taxes have been deducted from the amount of your requested RRSP Withdrawal.

Income Tax Rate Charged on Withdrawal

This is an estimate of the rate of income taxes paid on the RRSP Withdrawal amount. Expressed as a percentage, it is simply the Increased Taxes Payable Due to Withdrawal divided by the RRSP Withdrawal amount.

 

 

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