Saving & retirement · guide
OAS Clawback Calculator: how it works in 2026, with a worked example
See how much of your Old Age Security is clawed back on your income, how much room you have before it starts, and exactly when the reduction hits your payments (July to June, based on last year's return). Enter one total or your income by source, with dividends and capital gains counted the way the CRA counts them.
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 timing confuses everyone: the repayment for a given 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. The calculator lets you pick the income year so you can see both the payments starting this July (2025 income) and next July (2026 income).
The pension itself is the maximum for the current quarter, times 12, increased by any deferral and by 10% from age 75.
Worked example: $110,000 of 2026 income, aged 65 to 74
| Line | Amount |
|---|---|
| Maximum OAS, July to September 2026 rate | $751.97 a month, $9,023.64 a year |
| 2026 threshold | $95,323 |
| Income above the threshold | $14,677.00 |
| Recovery tax at 15% | $2,201.55 |
| OAS kept | $6,822.09 a year, $568.51 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 the effective marginal rate for a retiree 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 and will be slightly low.
- The 2026 full-clawback incomes are Service Canada estimates until they are finalized in October 2026.
Questions people ask
- What is the OAS clawback threshold for 2026?
- $95,323 of net income for the 2026 tax year. Income above that is subject to a 15% recovery tax, withheld from OAS payments from July 2027 to June 2028. For 2025 income the threshold was $93,454, which 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 are published in October). The exact number moves with the quarterly OAS rate because the clawback stops once it equals the full pension.
- Why is the clawback based on last year's income?
- Service Canada uses your most recent filed tax return to set the withholding for the July-to-June payment period. So 2025 income determines what is withheld from July 2026, and 2026 income determines July 2027 onward. The final amount is settled on your tax return; over- or under-withholding is corrected there.
- What counts as income for the clawback?
- Net income on line 23400, which 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. TFSA withdrawals, the Guaranteed Income Supplement and the OAS amount repaid do not count.
- How can I reduce the OAS clawback?
- Lower 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, spread capital gains over years, or defer OAS to 70 if income will be high in your late sixties. The calculator shows how much income you would need to shift to end the clawback.
- Should I defer OAS to avoid the clawback?
- Deferral raises OAS by 0.6% a month, up to 36% at 70, and 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 dollar terms 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) and is reduced dollar for dollar at 50 cents per dollar of income, separately from the OAS recovery tax.
- When does the OAS clawback actually come off my payments?
- Income earned in 2026 is reported on the return you file in spring 2027, and the recovery tax is withheld from your OAS payments from July 2027 to June 2028. It is then reconciled on your 2027 return. There is always a one-year lag.
- Do dividends and capital gains count toward the clawback?
- Yes, and dividends count for more than you receive: eligible dividends are grossed up by 38% in your net income, so $10,000 of dividends counts as $13,800. Capital gains count at half. TFSA withdrawals and GIS do not count at all.
- Is the clawback a cliff?
- No. It is 15 cents for every dollar of net income above the threshold, so earning $1,000 over costs $150 of OAS. The full pension is gone only at roughly $150,000 of income for those under 75. Each spouse is tested on their own income.
How to reduce or recover the clawback
The recovery tax is withheld from monthly OAS based on the return you filed two years back. If your income has since dropped, you can stop the withholding now.
Sources
Every figure on this page comes from one of these primary sources. Data last verified .