What is the OAS clawback threshold for 2026?

$95,323 of net income for the 2026 tax year. Income above that faces a 15% recovery tax, withheld from OAS payments from July 2027 to June 2028. For 2025 income the threshold was $93,454. That drives the payments from July 2026 to June 2027.

At what income is OAS fully clawed back?

Roughly $155,109 of 2026 income for people aged 65 to 74, and $161,088 for those 75 and over, according to Service Canada's estimates. Final figures come out in October. The exact number moves with the quarterly OAS rate, because the clawback stops once it equals the full pension.

What counts as income for the OAS clawback?

Net income on line 23400. That includes CPP, OAS itself, pensions, RRIF and RRSP withdrawals, employment and self-employment income, interest, the grossed-up value of dividends and taxable capital gains. Eligible dividends are grossed up by 38%, so $10,000 of dividends counts as $13,800. Capital gains count at half. TFSA withdrawals, the Guaranteed Income Supplement and the OAS amount repaid do not count. Each spouse is tested on their own income.

How can I reduce the OAS clawback?

Lower your net income in the years you receive OAS. Contribute to an RRSP if you are under 72 and have room. Draw from a TFSA instead of a RRIF. Split eligible pension income with a spouse. Hold investments that produce capital gains rather than dividends, and spread capital gains over years. Or defer OAS to 70 if your income will be high in your late sixties.

Should I defer OAS to avoid the clawback?

Deferral raises OAS by 0.6% a month, up to 36% at 70. It also avoids the clawback in high-income years before you start. If your income will still be above the threshold at 70, deferral only makes the clawback bigger in dollars, because there is more OAS to claw back. The break-even depends on your income path.

Does the clawback apply to the GIS?

No. The Guaranteed Income Supplement has its own, much lower income cut-off, around $22,800 for a single person. It is reduced at 50 cents per dollar of income, separately from the OAS recovery tax.

OAS Clawback Calculator (2026 Thresholds)

See how much of your Old Age Security is clawed back at your income, and how much room you have before it starts. You also see when the reduction hits your payments, from July to June, based on last year's return. Enter one total or your income by source, with dividends and capital gains counted the CRA's way.

OAS clawed back for the year$1,451.55About $120.96 less on each payment from July 2027 to June 2028, leaving $641.54 a month. Reducing 2026 net income by $9,677 would end the clawback. At this quarter's OAS rate, the whole pension is gone at $156,323 of 2026 income.

Net income against the 2026 threshold$105,000 of $95,323

OAS you keep$7,698 of $9,150

Net income for 2026	$105,000.00
Threshold for 2026 income	$95,323
Income over the threshold	$9,677.00
Recovery tax (15% of the excess)	− $1,451.55
OAS for the year (October to December 2026 rate)	$9,150.00
OAS you keep	$7,698.45
Same income as 2025 income (July 2026 to June 2027)	$618.18 / month kept

The timeline, in words. Income you earn in 2026 is reported on the return you file in spring 2027. Service Canada then withholds the recovery tax from your OAS payments from July 2027 to June 2028. The final amount is settled on your 2027 return, so any over- or under-withholding is corrected there. It is 15 cents per dollar, not a cliff, and each spouse is tested on their own income.

Show the math

Recovery tax = 15% × (net income − threshold), capped at the OAS received. Net income for the test is line 23400: CPP, pensions, RRIF/RRSP withdrawals, employment, interest, eligible dividends at 138% of cash, half of capital gains, and the OAS itself. TFSA withdrawals and GIS do not count. OAS used is the October to December 2026 maximum × 12 (indexed quarterly, so slightly low), with deferral at 0.6% per month and 10% more from 75. In parts mode that same figure is the OAS counted in your income. The pension is gone entirely at threshold + OAS ÷ 15% = $156,323. Service Canada's published figure ($155,109, an estimate until October) differs slightly because it uses the whole year's rates. Partial pensions (under 40 years of residence) are not modelled.

How this calculator works

Old Age Security is income-tested through the recovery tax, usually called the clawback. For every dollar of net income above the year’s threshold, you repay 15 cents of OAS, until the whole pension is repaid. The threshold is indexed every year.

The repayment for a tax year is collected by reducing your OAS payments from July of the next year to June of the year after, based on the income on your last return. Pick the income year to see the payments starting this July (2025 income) or next July (2026 income).

The pension itself is the maximum for the current quarter, times 12, raised by any deferral and by 10% from age 75.

Worked example: $110,000 of 2026 income, aged 65 to 74

Line	Amount
Maximum OAS, October to December 2026 rate	$762.50 a month, $9,150.00 a year
2026 threshold	$95,323
Income above the threshold	$14,677.00
Recovery tax at 15%	$2,201.55
OAS kept	$6,948.45 a year, $579.04 a month
Withheld from each payment, July 2027 to June 2028	$183.46

Every extra $1,000 of income in the clawback zone costs $150 of OAS, on top of the income tax on it. So a retiree’s effective marginal rate here is often above 45%.

Assumptions

Full OAS (40 years of Canadian residence after 18). Partial pensions are prorated and not modelled.
OAS is indexed every quarter. The annual figure uses the current quarter’s rate for all twelve months, so it will be slightly low.
The 2026 full-clawback incomes are Service Canada estimates until they are finalized in October 2026.

How to reduce or recover the clawback

The recovery tax is taken off your monthly OAS based on the return you filed two years ago. If your income has dropped since, you can stop it now.

File form T1213(OAS) to have Service Canada withhold less when this year’s income will be lower than the year they are using.Form T1213(OAS) ↗
Split up to half of eligible pension income with a lower-income spouse on both returns (form T1032). This is the biggest lever.Form T1032, joint election to split pension income ↗
Take extra spending money from your TFSA rather than your RRIF. TFSA money is not income for the clawback.Opening a TFSA ↗
If you are still working past 65, consider deferring OAS. You get a higher pension later and no clawback on what you earn now.Apply for Old Age Security ↗

Common questions

Frequently asked questions

What is the OAS clawback threshold for 2026?: $95,323 of net income for the 2026 tax year. Income above that faces a 15% recovery tax, withheld from OAS payments from July 2027 to June 2028. For 2025 income the threshold was $93,454. That drives the payments from July 2026 to June 2027.
At what income is OAS fully clawed back?: Roughly $155,109 of 2026 income for people aged 65 to 74, and $161,088 for those 75 and over, according to Service Canada's estimates. Final figures come out in October. The exact number moves with the quarterly OAS rate, because the clawback stops once it equals the full pension.
What counts as income for the OAS clawback?: Net income on line 23400. That includes CPP, OAS itself, pensions, RRIF and RRSP withdrawals, employment and self-employment income, interest, the grossed-up value of dividends and taxable capital gains. Eligible dividends are grossed up by 38%, so $10,000 of dividends counts as $13,800. Capital gains count at half. TFSA withdrawals, the Guaranteed Income Supplement and the OAS amount repaid do not count. Each spouse is tested on their own income.
How can I reduce the OAS clawback?: Lower your net income in the years you receive OAS. Contribute to an RRSP if you are under 72 and have room. Draw from a TFSA instead of a RRIF. Split eligible pension income with a spouse. Hold investments that produce capital gains rather than dividends, and spread capital gains over years. Or defer OAS to 70 if your income will be high in your late sixties.
Should I defer OAS to avoid the clawback?: Deferral raises OAS by 0.6% a month, up to 36% at 70. It also avoids the clawback in high-income years before you start. If your income will still be above the threshold at 70, deferral only makes the clawback bigger in dollars, because there is more OAS to claw back. The break-even depends on your income path.
Does the clawback apply to the GIS?: No. The Guaranteed Income Supplement has its own, much lower income cut-off, around $22,800 for a single person. It is reduced at 50 cents per dollar of income, separately from the OAS recovery tax.
When does the OAS clawback come off my payments?: Income earned in 2026 goes on the return you file in spring 2027. Service Canada then withholds the recovery tax from your OAS payments from July 2027 to June 2028, and the final amount is settled on your 2027 return. There is always a one-year lag.

Tax-saving strategies that use this calculator

Pension Income Splitting in Canada (2026)Move up to half of eligible pension income to your spouse on Form T1032, what qualifies at 65 and before, the OAS clawback, and why 50% is often too much.

Sources

Every figure on this page comes from one of these primary sources. Data last verified September 7, 2026.

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Data verified for tax year 2026: September 7, 2026 Updated September 7, 2026 By Nishant Malik, founder of GlassLayer