Old Age Security (OAS) is a monthly pension for most Canadians aged 65 and over. If your income is high, you have to pay some of it back. That repayment is called the OAS recovery tax, and many people call it the clawback.
How the clawback works
You repay 15 cents of OAS for every dollar your net income is above a yearly threshold. For income earned in 2026, the threshold is $95,323.
The repayment is taken out of your OAS payments starting in July of the next year, and it runs for twelve months.
When is OAS fully recovered?
The more your income is above the threshold, the more you repay, until the whole OAS pension is repaid. For the period starting July 2027, which is based on 2026 income, Canada.ca lists these incomes where the OAS is fully recovered:
- $155,320 for ages 65 to 74.
- $161,320 for ages 75 and over.
Maximum monthly OAS for October to December 2026 is $762.50 for ages 65 to 74 and $838.75 for ages 75 and over.
Example
Your net income in 2026 is $110,000, and you are 70. You are $14,677 over the threshold. 15% of that is about $2,202, which you repay over the year from July 2027. You keep about $6,800 of about $9,000.
Try your own income in the OAS clawback calculator.
What counts as income
The clawback uses your net income for tax purposes, which is your income after deductions such as RRSP contributions. It includes CPP, RRSP and RRIF withdrawals, workplace pensions, investment income and capital gains.
Ways to reduce it
- Make RRSP contributions while you are still allowed to. The deduction lowers net income.
- Split eligible pension income with a spouse, where the rules allow it.
- Use your TFSA for withdrawals. TFSA money does not count as income.
- Spread out income. Large one-time gains in one year can trigger the clawback for that year only.
- Think about when you take CPP and RRIF money. Starting CPP later increases your pension but also your future income. See when to start CPP.
- Consider delaying OAS. You can delay it up to age 70 for a larger monthly amount. That can help if your income is high now and lower later.
Remember
Even with a clawback, OAS is worth keeping, and each extra dollar of income costs you 15 cents more only above the threshold. Do not turn down income only to avoid it without doing the sums. A tax professional can help you plan.
OAS clawback calculator See how much OAS you could repay on your income.Sources
This article is for education and is not financial, tax or legal advice. Figures are checked against the sources above and may change. Read the full disclaimer.