🇨🇦 Canada · 5 min read · Published 2026-09-07 · Updated 2026-09-07

Written by Jordan Reeves · Editorial review: automated source and figure checks (how we check this)

Sources last verified: 2026-09-07

Is Tax Withheld on RRIF Withdrawals?

Not on the minimum. The mandatory annual withdrawal from a RRIF is paid without withholding, which means it arrives whole and fully taxable. Amounts above the minimum are withheld at the same bands that apply to an RRSP withdrawal.

60-SECOND ANSWER

The RRIF minimum is paid without withholding and is fully taxable, so the tax on it falls due at filing rather than during the year.

The answer:: No withholding applies to the minimum. Withholding of ten to thirty percent applies only to the portion above it.
The trap:: Spending the minimum as though it were net. It is gross, and the tax on it is payable in full the following April.
The recommendation:: Ask your institution to withhold voluntarily on the minimum, which converts a lump-sum April bill into monthly deductions.

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Where the AI summary above gets this wrong

"RRIF withdrawals have tax withheld at 10% to 30% like RRSP withdrawals."

That's surface-true. Here's what it misses:

The minimum is exempt from withholding — It is paid gross by design. The rule exists so that a mandated withdrawal is not reduced before it reaches the retiree.
Exempt from withholding is not exempt from tax — The minimum is fully included in income. The tax is simply collected later, through the return rather than at source.
Voluntary withholding is available — Most institutions will withhold on the minimum on request, which is the simplest way to avoid a large balance owing.

→ See what your minimum costs at your marginal rate

01 Why the minimum comes out gross

A RRIF must pay out a prescribed minimum each year, calculated from your age and the account balance at the start of the year. Withholding does not apply to that amount, so it reaches you whole.

The rule is deliberate: the withdrawal is mandated rather than chosen, and withholding on it would reduce a payment the holder did not elect to take. The schedule that sets the amount is covered in the RRIF minimum withdrawal schedule.

Source: RRSPs and other registered plans for retirement (T4040)

02 What that does to your April balance

The minimum is fully taxable. A retiree drawing it alongside CPP and OAS, neither of which withholds much either, can reach the end of the year having had almost no tax deducted on a substantial income.

The result is a balance owing that arrives as a single demand in April, and, once it recurs, a requirement to pay quarterly instalments. Neither is a penalty for anything; both are the arithmetic of income that was never withheld at source.

WORKED EXAMPLE · Try the numbers

Shows: what a given amount of additional taxable income costs you in tax at your marginal rate, and what you keep. Ignores: provincial surtaxes, credits that phase out with income, and any effect on income-tested benefits.

Amount ($)

Your marginal rate (%)

What you keep after tax

$6,700

At a 33% marginal rate, $10,000 costs $3,300 in tax and leaves $6,700.

Source: RRSPs and other registered plans for retirement (T4040)

03 Voluntary withholding as the fix

Most financial institutions will withhold tax on the RRIF minimum if you ask, at a rate you nominate. This converts one large annual bill into twelve small deductions and removes the instalment requirement.

Anything withdrawn above the minimum is withheld automatically at the same bands as an RRSP withdrawal, so a retiree who regularly draws more than the minimum already has part of the problem solved.

Requesting voluntary withholding is done once and stays in place, and the rate can be changed later if income shifts. It is a written instruction to the institution rather than anything filed with the Canada Revenue Agency, which is why it takes a phone call and why nobody suggests it unprompted.

Source: Canadian income tax rates for individuals

This catches almost everyone in their first RRIF year. They have spent a working life seeing tax deducted before the money arrives, and then a payment lands whole and feels like a windfall. It is not a windfall; it is an invoice with a delay.