How it works
The official name is the OAS pension recovery tax. For the 2026 income year, if your individual net income (line 23400) is above $95,323, you repay 15% of the excess, up to the full OAS you received. The CRA collects it through monthly deductions from your OAS, based on your last return, and squares it up when you file.
Worked example
CPP of $1,200 a month, full OAS from 65 and $100,000 of other income (workplace pension and RRIF):
- Net income: $100,000 + CPP $14,400 + OAS $9,150 = $123,550.
- Above the threshold: $123,550 − $95,323 = $28,227.
- Clawback: 15% = $4,234 a year ($352.84 a month).
- OAS you keep: $409.66 a month.
Clawback by income (CPP $1,200 a month, full OAS at 65)
| Other income | Net income | Clawback per year | OAS kept per month |
|---|---|---|---|
| $70,000 | $93,550 | $0 | $762.50 |
| $80,000 | $103,550 | $1,234 | $659.66 |
| $90,000 | $113,550 | $2,734 | $534.66 |
| $100,000 | $123,550 | $4,234 | $409.66 |
| $110,000 | $133,550 | $5,734 | $284.66 |
| $120,000 | $143,550 | $7,234 | $159.66 |
| $135,000 | $158,550 | $9,150 | $0.00 |
For people aged 65–74 the OAS is completely gone at roughly $156,000 of net income; at 75+ the higher OAS lasts to about $162,000.
Gentle ways to reduce it
- Pension income splitting with a spouse: up to 50% of eligible pension income (including RRIF from 65) can be moved to the lower-income spouse.
- Draw RRSP money earlier, in your 60s before OAS starts, to smooth income.
- Use your TFSA: withdrawals are not income and do not count.
- Defer OAS to a year when your income will be lower — you also get 0.6% more per month.
- Be careful with large one-off capital gains in a single year.
Quick reference: CPP and OAS in 2026
| CPP | OAS | |
|---|---|---|
| Based on | Your contributions from work | Years lived in Canada after 18 |
| Earliest start | 60 (−0.6% a month before 65) | 65 |
| Latest useful start | 70 (+0.7% a month after 65) | 70 (+0.6% a month after 65) |
| Indexed | Every January | Every quarter |
| Taxable | Yes | Yes, plus clawback above $95,323 |
Before you decide
- Check your statement. My Service Canada Account shows your CPP estimate and your contribution history; fix any missing years early.
- Think as a couple. CPP can be shared between spouses to lower tax, and the survivor benefit depends on both pensions.
- Remember the GIS. On a low income, the Guaranteed Income Supplement can add more than OAS itself — and it is not taxable.
- Apply ahead. Apply for CPP up to 12 months before you want it to start; Service Canada enrols many people in OAS automatically and writes to you the month after you turn 64.
All amounts are the official ESDC figures checked on 5 November 2026 (CPP 2026, OAS October–December 2026). This page gives estimates in today’s dollars, before income tax.
FAQ
What is the OAS clawback threshold for 2026?
$95,323 of individual net income. You repay 15% of income above that.
How much OAS is clawed back on $100,000 of other income?
With $1,200 a month of CPP and full OAS, net income is $123,550 and the clawback is about $4,234 a year ($352.84 a month).
Does TFSA income count for the OAS clawback?
No. TFSA withdrawals and growth are not taxable income, so they do not affect the clawback.
Sources (checked 5 November 2026): Employment and Social Development Canada, “Maximum benefit amounts and related figures – CPP (2026) and OAS (October to December 2026)” (CPP max at 65 $1,507.65; OAS $762.50 / $838.75; recovery threshold $95,323; deferral 0.6% a month); canada.ca “CPP: pensions and benefits monthly amounts” (average new pension at 65 $858.34, July 2026); canada.ca “CPP retirement pension – how much you could receive” (−0.6%/month before 65, +0.7%/month after 65).