When you take money out of a Registered Retirement Income Fund, your financial institution withholds tax at the source only on the portion above your annual minimum. The RRIF withholding tax rates for residents of Canada outside Quebec are 10% on excess amounts up to $5,000, 20% on amounts over $5,000 up to $15,000, and 30% on anything over $15,000.1Canada Revenue Agency. Tax Rates on Withdrawals The minimum amount itself comes to you with nothing withheld, though it is still taxable when you file.
Why the Minimum Amount Has No Tax Withheld
Every RRIF must pay out at least a minimum amount each year, starting the year after the fund is set up. The institution calculates it from your age (or your spouse’s or common-law partner’s age, if you elected that option when the RRIF was opened) and the fair market value of the plan at the start of the year. For anyone 70 or younger, the factor is 1 divided by 90 minus your age, so a 65-year-old’s minimum is 4% of the plan value. At 71 the prescribed factor is 5.28%, at 80 it is 6.82%, and it tops out at 20% from age 95 onward.2Canada.ca. Chart – Prescribed Factors
No tax is withheld on this minimum. The institution pays it to you in full.3Canada Revenue Agency. Frequently Asked Questions (RRSPs/RRIFs) The full amount still counts as taxable income on your return, which catches some retirees off guard: a large minimum payment on a large RRIF can produce a real tax bill in April even though nothing was deducted through the year.
The 10%, 20%, and 30% Schedule on Excess Withdrawals
Anything above the minimum triggers withholding, deducted from the gross amount before you receive the rest. For residents of Canada outside Quebec:
- 10% on the excess portion up to $5,000
- 20% on the excess portion over $5,000 up to $15,000
- 30% on the excess portion over $15,000
These are flat rates on the whole excess, not graduated brackets.1Canada Revenue Agency. Tax Rates on Withdrawals A $16,000 excess withdrawal has 30% withheld on the full $16,000, not 10% on the first $5,000 and higher rates on the rest. This is the single most common misunderstanding people have about the schedule.
The withholding is a credit toward your actual tax bill, not a separate tax. If more was withheld than you owe on your total income, you get the difference back. If your combined income from pensions, CPP, OAS, and the RRIF pushes you into a higher bracket, the 10% or 20% withheld may fall short, and you will owe the balance at filing time.
How Multiple Withdrawals Are Assessed
The CRA generally applies withholding to each excess withdrawal on its own. Two separate $4,000 excess withdrawals months apart are each taxed at 10%, not combined at 20%. But the agency looks through arrangements designed to keep each request under a threshold. Multiple requests submitted in a short period are treated as one withdrawal and taxed on the combined total.3Canada Revenue Agency. Frequently Asked Questions (RRSPs/RRIFs)
Same-day requests are treated as one. And if you set up monthly installments above the minimum through a single standing instruction, the rate on each payment is based on the total annual amount, not the size of each individual cheque.3Canada Revenue Agency. Frequently Asked Questions (RRSPs/RRIFs) A separate one-time request later in the year is evaluated on its own.
Rates for Quebec Residents
Quebec administers its own income tax, so the federal rates are reduced and a provincial withholding is added:
- Up to $5,000: 5% federal plus 14% provincial
- $5,001 to $15,000: 10% federal plus 14% provincial
- Over $15,000: 15% federal plus 14% provincial
The federal rate is lower because the province collects its share directly.1Canada Revenue Agency. Tax Rates on Withdrawals Quebec’s provincial rate is a flat 14% on RRIF excess amounts regardless of size.4Revenu Québec. Payments From an RRSP, a VRSP, a PRPP or a RRIF Combined totals of 19%, 24%, and 29% land close to what other provinces see, but you get a separate federal and provincial slip and the withholdings appear on each.
Rates for Non-Residents of Canada
If you live outside Canada and receive RRIF payments, the 10/20/30 schedule does not apply. Part XIII of the Income Tax Act imposes a flat 25% withholding on the gross amount of most payments to non-residents.5Canada.ca. Rates for Part XIII Tax
A tax treaty between Canada and your country of residence can lower that rate. Many treaties bring periodic pension payments down to 15% or less, but the reduction depends on the specific treaty and the type of payment. To get the lower rate, your financial institution generally needs proof of your country of residence before applying it.6Canada Revenue Agency. Applicable Rate of Part XIII Tax on Amounts Paid or Credited to Persons in Countries With Which Canada Has a Tax Convention
Asking for More Tax to Be Withheld
The standard rates often understate what higher-income retirees actually owe. If your RRIF payments combined with CPP, OAS, and other pensions sit well above the lowest tax bracket, 10% or 20% withholding will leave you with a large balance due in April. You can ask your financial institution to withhold more than the standard rate on any withdrawal. Most accommodate this through a written request or an option on the withdrawal form. It does not change what you ultimately owe. It just shifts more of the payment to source deduction so less is owing later.