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RRSP Over-Contributions (Excess Contributions) | RRSP Withdrawals

RRSP Over-Contributions Penalty / Excess Contributions
You are subject to a penalty of 1% per month on the portion of your RRSP contribution that exceeds your lifetime over-contribution limit of $2,000. The $2,000 is reduced when you have a negative RRSP deduction limit which may be due to a Past Service Pension Adjustment (PSPA) amount. Also, you can only qualify for the additional $2,000 amount if you were 19 or older than 19.

Generally, you have to pay a tax of 1% per month on your unused contributions that exceed your RRSP deduction limit by more than $2,000. Your notice of assessment or notice of reassessment will indicate that you may have to pay a 1% tax on RRSP excess contributions if your unused RRSP contributions exceed your RRSP deduction limit. However, if you withdrew the excess amounts, or all your contributions were qualifying group RRSP contributions, or from contributions that you made before February 27, 1995, you may not have to pay this 1% tax on all your excess contributions.

RRSP Withdrawals
When redeeming units from an RRSP, the withdrawal will automatically be reduced by the appropriate amount of withholding tax. The table below indicates the amount of tax that will be withheld at source on RRSP withdrawals, as prescribed by Canada Revenue Agency (CRA).

The Amount of RRSP Withdrawals

All Provinces Except Quebec


Up to $5,000 10% 21%
Over $5,000 to $15,000 20% 26%
Over $15,000 30% 31%