Increase your Pay Cheque – Pay Less Tax

Most people we speak with get excited when they receive a tax refund, but it may be because they’ve paid too much income tax throughout the year. Paying too much tax just to get some back is equivalent to providing the government with an interest free loan. Wouldn’t you rather have this money month-to-month and use it as you please? Did you know that if you have regular contributions being deposited into your Registered Retirement Savings Plan (RRSP) you can request to have less income tax taken off your regular paycheques?

Case Study

Lucette contributes $1,000 per month to her RRSP. She usually receives a tax refund of $4,800*, but would prefer to have control over this money throughout the year. By completing the “Request to Reduce Tax Deductions at Source” form, Lucette is able to increase her paycheque by approximately $400 per month (see your advisor for this form). This increase in cash flow gives Lucette the ability to use $400 today instead of having to wait for her tax refund a year from now. Now she can use that money to increase her regular RRSP contributions, make mortgage payments, or to supplement her daily living expenses.

Speak with your Advisor to see if this strategy works for you. 

*Based on a 40% marginal tax rate.


The case study is for illustration purposes only. The information provided is for general information purposes only and is not intended as tax advice to an individual. Any opinion expressed herein is based solely upon the author’s current analysis and interpretation of such information, is subject to change and does not necessarily represent the opinions of Harbourfront Wealth Management Inc.


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