Quick answer: The OAS clawback (technically the OAS recovery tax) is 15% of every dollar of net world income above the indexed annual threshold. For 2026 net world income, the threshold is $95,323 — this affects OAS payments from July 2027 to June 2028. For 2025 income, the threshold is $93,454 (affects OAS July 2026 to June 2027).
What this means: The income year on your T1 picks the threshold for the next benefit period — not the calendar year you receive OAS. OAS is fully clawed back at $152,062 (age 65-74) or $157,923 (age 75+) for 2025 income, and at estimated $154,753 / $160,696 for 2026 income (finalized by Service Canada in October 2026).
What to do next: Plug in your own net world income to see the recovery tax. Run the OAS clawback calculator →
2026 OAS clawback income limits at a glance
Three figures define the clawback for any income year: the minimum threshold where the recovery tax begins, the recovery rate (always 15%), and the maximum threshold where OAS is fully eliminated. For the 2026 income year — the one most people are planning around right now — the limits published by Canada.ca are:
| 2026 income limit | Net world income | What happens |
|---|---|---|
| Below the floor | Up to $95,323 | No recovery tax. Full OAS retained. |
| In the clawback zone (age 65-74) | $95,323 – $154,753* | 15% recovery tax on income above $95,323. |
| Full clawback (age 65-74) | Above $154,753* | OAS reduced to zero. |
| In the clawback zone (age 75+) | $95,323 – $160,696* | 15% recovery tax on income above $95,323; higher ceiling reflects the 10% senior boost. |
| Full clawback (age 75+) | Above $160,696* | OAS reduced to zero. |
*The 2026 maximum thresholds ($154,753 and $160,696) are estimates until Service Canada finalizes the 2026 maximum annual OAS pension in October 2026. The $95,323 minimum threshold is final because it is set by the indexation formula in the Old Age Security Act.
How the OAS recovery tax works
The OAS recovery tax repays part or all of your Old Age Security pension once your net world income on line 23400 of your T1 return passes the federally indexed threshold. The recovery rate is a flat 15% of the excess. The reconciliation is reported on line 23500 (social benefits repayment) and again on line 42200 of your return.
Two figures matter for any given income year:
- The minimum income recovery threshold is the income above which the recovery tax begins.
- The maximum income recovery threshold (full clawback ceiling) is the income above which OAS is fully eliminated. There is one ceiling for ages 65 to 74 and a higher ceiling for ages 75 and over, because the age-75 group receives a 10% larger pension.
OAS clawback thresholds by income year
The Government of Canada publishes the minimum threshold for each income year in advance and finalizes the full clawback ceilings in October. The figures below come directly from the Old Age Security pension recovery tax page on Canada.ca.
| Income year | Minimum threshold | Full clawback (65-74) | Full clawback (75+) | OAS benefit period affected |
|---|---|---|---|---|
| 2024 | $90,997 | $148,451 | $154,196 | July 2025 to June 2026 |
| 2025 | $93,454 | $152,062 | $157,923 | July 2026 to June 2027 |
| 2026 | $95,323 | $154,753 (estimate) | $160,696 (estimate) | July 2027 to June 2028 |
The 2026 full clawback ceilings are estimates until October 2026, when Service Canada finalizes the maximum annual OAS pension for the year. The $95,323 minimum threshold is the indexed figure from the Old Age Security Act and is final.
2025 vs 2026 income year: which threshold applies right now
The income year you file on your T1 sets the threshold for the next OAS benefit period. CRA uses your prior year’s net world income to calculate the recovery tax for OAS paid from July of the following year through June of the year after.
| If you are receiving OAS in this benefit period… | The clawback is calculated against… | Using this threshold |
|---|---|---|
| July 2025 to June 2026 | 2024 T1 net world income | $90,997 |
| July 2026 to June 2027 | 2025 T1 net world income | $93,454 |
| July 2027 to June 2028 | 2026 T1 net world income | $95,323 |
OAS payments received during 2026 straddle two benefit periods. January to June 2026 falls inside the July 2025 to June 2026 period (based on 2024 income, threshold $90,997). July to December 2026 falls inside the July 2026 to June 2027 period (based on 2025 income, threshold $93,454). The thresholds applied to each half of the calendar year are different.
Recovery tax examples at $100,000, $120,000, and $150,000 of net world income
The annual recovery tax is 15% of the difference between net world income and the threshold for the income year you are filing.
| Net world income | 2025 income year ($93,454 threshold) | 2026 income year ($95,323 threshold) |
|---|---|---|
| $100,000 | $981.90 ($6,546 over × 15%) | $701.55 ($4,677 over × 15%) |
| $120,000 | $3,981.90 ($26,546 over × 15%) | $3,701.55 ($24,677 over × 15%) |
| $150,000 | $8,481.90 ($56,546 over × 15%) | $8,201.55 ($54,677 over × 15%) |
The recovery tax is capped at the OAS amount you would otherwise receive. None of the $150,000 cases above are capped, because both the 2025 and 2026 full clawback ceilings (65-74) sit above $150,000.
The annual amount is collected through monthly OAS reductions in the upcoming benefit year. For 2025 income of $120,000, the $3,981.90 recovery tax is spread across 12 OAS payments from July 2026 to June 2027 — about $331.83 per month off the cheque.
Maximum monthly OAS in 2026 (so you can see what is at stake)
From the OAS payments page on Canada.ca, the maximum monthly pension for the April-June 2026 quarter is:
- Age 65 to 74: up to $743.05 per month ($8,916.60 per year if received in full).
- Age 75 and over: up to $817.36 per month ($9,808.32 per year).
OAS amounts are indexed quarterly based on changes in the Consumer Price Index. Service Canada publishes the next quarter’s maximum monthly amounts on the OAS payment amounts page before each quarter begins. The 15% recovery rate is statutory and does not change with the quarter.
What counts as net world income
Net world income is line 23400 of your T1 return — total income from all sources worldwide, less eligible deductions such as RRSP contributions, union dues, and child care expenses. For the OAS recovery tax, the CRA adjusts line 23400 on the Federal Worksheet to back out the universal child care benefit and RDSP income and add back any UCCB or RDSP repaid.
Items that do push you toward the clawback threshold:
- Employment and self-employment income
- CPP, QPP, and foreign pension income
- RRSP and RRIF withdrawals
- Workplace pension and annuity income
- Interest, taxable dividends (at the grossed-up amount), and the taxable portion of capital gains
- Rental income net of expenses
- The OAS pension itself
Items that do not appear in net world income include TFSA withdrawals, the non-taxable portion of capital gains, GIS payments, and the proceeds of a principal residence sale that is fully exempt. For a full breakdown by income type, see What income counts toward OAS clawback in Canada.
How CRA collects the recovery tax
After you file your T1, CRA calculates the recovery tax at line 23500 and Service Canada reduces your monthly OAS payments for the upcoming July-to-June benefit year. If your income for the current year is expected to drop substantially below the previous year, you can request a reduction in monthly withholding using Form T1213(OAS), Request to Reduce Old Age Security Recovery Tax at Source. Approval is at CRA’s discretion and is reviewed annually.
If you receive OAS in a country where the non-resident tax on Canadian pensions is 25% or more, you must also pay the recovery tax under the same threshold rules.
Ways to reduce your exposure
The main levers retirees use to manage net world income for OAS purposes are pension income splitting (up to 50% of eligible pension income with a spouse), drawing from a TFSA in years that would otherwise push income above the threshold, smoothing RRIF withdrawals across years, and timing capital gains realizations. The trade-offs of each are covered in OAS clawback in retirement: how to avoid the 15% recovery tax.
Common mistakes
- Using the current-year threshold for current-year OAS. The threshold that applies is set by the income year you are filing, which is the year before the OAS benefit period begins. The 2026 threshold of $95,323 does not affect OAS being paid right now.
- Treating the cash dividend as the income figure. Eligible Canadian dividends are reported at the grossed-up amount (138% of the cash dividend). A $10,000 cash dividend lands as $13,800 of income for clawback purposes.
- Assuming TFSA withdrawals count. TFSA withdrawals do not appear on the T1 at all and have no effect on line 23400.
- Forgetting that OAS itself is in net world income. OAS payments are taxable and are included in line 23400 even though a deduction is available at line 23500 for the recovery tax amount.
- Ignoring pension splitting. Splitting up to 50% of eligible pension income to a lower-income spouse can move both spouses below the threshold. The election is made annually on Form T1032.
Frequently asked questions
What is the OAS clawback threshold for 2026?
$95,323. This is the minimum threshold for the 2026 income year, which determines OAS payments from July 2027 to June 2028.
What income year applies to OAS I receive in 2026?
OAS paid from January to June 2026 is reconciled against your 2024 net world income (threshold $90,997). OAS paid from July to December 2026 is reconciled against your 2025 net world income (threshold $93,454).
At what income is OAS fully clawed back in 2026?
For 2025 income, full clawback occurs at $152,062 (age 65-74) and $157,923 (age 75+). For 2026 income, the estimates from Canada.ca are $154,753 and $160,696, finalized in October 2026.
Does the recovery tax apply to CPP?
No. The recovery tax applies only to Old Age Security. CPP is unaffected, although CPP income counts in net world income and pushes other recipients toward the OAS threshold.
Can I avoid the clawback by deferring OAS?
Sometimes. Deferring OAS past age 65 increases the monthly amount by 0.6% per month (up to 36% at age 70). If you defer OAS to a year when other income is lower, you may both reduce or eliminate the clawback and lock in a larger benefit. See OAS deferral bonus: delaying OAS past 65.
Frequently asked questions
- What is the OAS clawback threshold for 2026?
- The 2026 income-year threshold is $95,323. This determines OAS payments from July 2027 to June 2028.
- What rate is OAS clawed back?
- 15% of every dollar of net world income above the threshold for the income year being filed.
- At what income is OAS fully clawed back?
- Based on 2026 income, $154,753 for ages 65 to 74, and $160,696 for age 75 and over.
- Does TFSA income trigger OAS clawback?
- No. TFSA withdrawals are excluded from net world income.
- Can pension splitting reduce OAS clawback?
- Yes. Eligible pension income split with a spouse reduces the higher-earner's net world income, lowering or eliminating their recovery tax.
- Why is the 75+ full-clawback ceiling higher?
- Recipients aged 75+ get 10% more OAS, so it takes more income above the same $95,323 threshold to claw it back fully.
- Why does the income year not match the OAS payment year?
- The recovery tax always uses the prior year's net world income to determine OAS for the upcoming July-to-June benefit period.