Summary: Are you drawing on your RRSP or perhaps, you're drawing on your RRIF and you have no idea how the withholding tax works? The RRSP withholding tax to me is a very critical part that people just don't understand. Withdraw from RRSPĀ First, let's start with your RRSP. You have been saving, contributing and getting the deduction against your income. Now, for whatever reason you need to withdraw it. You decide to draw on your RRSP. How does it actually work?