RRSP and Your Taxes: Deductions, Withdrawals and Withholding Tax

RRSP contributions reduce your taxable income, up to your deduction limit shown on your notice of assessment. Withdrawals are taxable, and your bank withholds 10% (up to $5,000), 20% ($5,000 to $15,000) or 30% (over $15,000) outside Quebec. The Home Buyers' Plan and Lifelong Learning Plan let you withdraw without paying tax if you repay.

Last verified November 8, 2026 How we check our facts

Contributions

Your RRSP deduction limit is on your latest notice of assessment (or Form T1028). Contributing more than $2,000 over your limit triggers a tax of 1% per month on the excess.

Withdrawals: tax withheld at source

Amount withdrawn	Withholding (outside Quebec)
Up to $5,000	10%
$5,000 to $15,000	20%
Over $15,000	30%

In Quebec the federal withholding rates are half these figures. Non-residents pay 25% unless a tax treaty reduces it. The withdrawal is added to your income, so you may owe more (or get some back) when you file.

Withdrawing without tax

Home Buyers' Plan: up to $60,000 toward a first home. First withdrawals from 2026 to 2028 have the first repayment year pushed to the fifth year after the withdrawal.
Lifelong Learning Plan: up to $10,000 a year and $20,000 in total for education or training.

Contributions made in the 89 days before an HBP or LLP withdrawal may not be fully deductible.

RRSP or workplace pension?

If you belong to a workplace pension plan, your pension adjustment (T4 box 52) reduces your RRSP room for the next year. See pension adjustment explained.

Do You Have to Claim a TFSA on Your Tax Return? Generally no. Investment income earned in a TFSA isn't taxed, and withdrawals aren't taxable income, so they don't go on your return. The 2026 TFSA dollar limit is $7,000. Withdrawals are added back to your contribution room on January 1 of the next year. Pension Adjustment (T4 Box 52) Explained The pension adjustment in box 52 of your T4 is the value of the pension benefits you earned that year in a registered pension plan or deferred profit-sharing plan. The CRA uses it to reduce your RRSP deduction limit for the next year. You don't enter it on your return. Types of Pension Plans in Canada: Public, Workplace and Personal Canada's retirement system has three layers: public pensions (CPP or QPP and Old Age Security), workplace registered pension plans (defined benefit, defined contribution or a mix), and personal savings like RRSPs, TFSAs and pooled plans such as PRPPs and the Saskatchewan Pension Plan.

Sources

Tax rates on withdrawals (CRA) (canada.ca)
RRSPs and other registered plans (T4040) (canada.ca)
Excess contributions (CRA) (canada.ca)
The Home Buyers' Plan (canada.ca)
HBP participation (canada.ca)
Lifelong Learning Plan (canada.ca)

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