What is the tax rate when I withdraw some of my RRSP money? I know there is an amount taken off right away but what is the rate payable at tax time?

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I have recently become unemployed and am considering cashing out some of my rrsp's to pay off my mortgage. i know rrsp's get taxed at nominal rates when cashed out. does being unemployed provide any advantages in reducing the taxes taken up front? are there any special circumstances/manoeuvres that reduce the taxes paid up front?

Cashing in your RRSP is never a great solution so consider loans before you do. But if you must, the thing to consider here is how much you intend to cash-in for your RRSPs. Being unemployed simply means that you will not have employment income this year (or very little, if you still worked earlier in the year before unemployment) but keep in mind other sources of income like investment incomes, benefits, etc. to determine your total income for the year and see if the cashed-in RRSP would take you into a higher tax bracket, especially if you take out a large amount. (as it is considered income) So the only "advantage" as you say is having less total income to report for the year but being unemployed does not affect your withholding taxes. Withholding taxes are taxes taken at the time of the cash-out by the bank. They rates are something like this: Withdrawal Amount % Tax Withheld From $0 to $5,000: 10% (5% in Quebec) From $5,001 to $15,000: 20% (10% in Quebec) Greater than $15,000: 30% (15% in Quebec) As you know the withholding taxes are quite significant and they are taxed on each lump sum amount you cash-out. You have the option of taking out smaller lump sums throughout the year to reduce the tax taken off the top. (ie. instead of cashing out a lump sum of $20,000, with 30% withholding tax, take out four $5,000 sums throughout the year with 10% each.) Of course, keep in mind how it may affect your income taxes for April when you do this. Good luck