OAS Clawback Calculator 2026
How much Old Age Security you lose above the $95,323 recovery threshold for 2026, the income where it is fully clawed back, your effective marginal rate in the zone, and what drawing from a TFSA, splitting pension income or deferring OAS would save.
| Threshold | — |
|---|---|
| Income over the threshold | — |
| Full annual OAS at your age | — |
| Recovery tax (15%) | — |
| OAS you keep: year / month | — |
| Effective marginal rate in the clawback zone | — |
| Income at which OAS is fully clawed back | — |
| Drawing from the TFSA instead of the RRIF | — |
| Pension income splitting | — |
| Deferral effect | — |
In short
Old Age Security is reduced by 15% of net income above $95,323 for the 2026 tax year (recovered from July 2027 to June 2028) and is fully clawed back at about $154,700 for ages 65–74; at $120,000 of income a retiree loses about $3,700 of the $8,900 pension. TFSA withdrawals do not count, pension income splitting and deferring OAS to 70 (a 36% increase) reduce the clawback.
Who this is for: Retirees and those approaching 65 with RRIF, pension or investment income near the recovery threshold, and planners timing withdrawals.
The OAS clawback (recovery tax) in 2026 and how to reduce it
Old Age Security is reduced by 15 cents for every dollar of net income above $95,323 (2026 income year), so the full pension of about $8,900 a year for a 65–74-year-old disappears at roughly $154,700 (higher after the 10% increase at 75). The tax is assessed on your return and withheld from the next year's payments — July 2027 to June 2028 for 2026 income — which is why a single large RRIF withdrawal or capital gain can wipe out a year of OAS.
- Effective marginal rate: in the clawback zone each extra dollar loses income tax (about 31–44%) plus 15% of OAS — 46–59% in total.
- TFSA first: TFSA withdrawals are not income, so funding spending from a TFSA instead of a RRIF keeps net income under the threshold.
- Pension income splitting: up to 50% of eligible pension income (RRIF after 65, employer pensions, annuities) can be allocated to a lower-income spouse on the return.
- Deferral: delaying OAS to 70 increases it by 36% and avoids clawback in high-income early-retirement years; RRSP melt-down before 65 can smooth income.
- Dividends hurt more: eligible dividends are grossed up by 38% before the clawback test, so $10,000 of dividends counts as $13,800 of income.
Assumptions
- Full OAS = monthly amount entered × 12 × 1.10 if 75+ × (1 + 0.6% × deferral months); clawback = min(full OAS, 15% × (net income − $95,323)).
- Effective marginal rate = marginal income tax (2026 engine, province selected) + 15% inside the clawback zone; full-clawback income = threshold + full OAS ÷ 0.15.
- TFSA swap and pension splitting (50% of the eligible amount) recompute the clawback on the reduced net income.
Worked example
Income over the threshold $24,677 × 15% = $3,702 clawed back from a full OAS of $8,907 — you keep $5,206 ($434 a month). Effective marginal rate in the zone about 58.4% (43.4% income tax + 15% recovery). Full clawback at $154,705. Drawing $20,000 from a TFSA instead of the RRIF cuts the clawback by $3,000 and income tax by about $8,700; splitting $30,000 of RRIF income with a spouse (50% = $15,000) saves $2,250 of clawback.
Frequently asked questions
What is the OAS clawback threshold for 2026?
$95,323 of net income for the 2026 tax year (recovery period July 2027 to June 2028); $93,454 applied to 2025 income. Above it, OAS is reduced by 15% of the excess.
At what income is OAS fully clawed back?
About $154,700 for ages 65–74 and roughly $160,600 for 75 and over in 2026, where 15% of the excess equals the full pension.
Does TFSA income count towards the clawback?
No — TFSA withdrawals are not income for any tax or benefit purpose, which is why retirees in the clawback zone draw from TFSAs before RRIFs.
Do capital gains trigger the OAS clawback?
Yes — the taxable half of a capital gain is added to net income; a $100,000 gain adds $50,000 and can cost up to $7,500 of OAS, which is a reason to spread sales over years.
Is the clawback based on individual or household income?
Individual net income — each spouse is tested separately, so pension income splitting can keep both below the threshold.
Can I get the clawback back?
It is reassessed every year: if your income falls below the threshold in a later year, full OAS resumes in the following July; you can also request a reduction in withholding (form T1213(OAS)) if your income has dropped.
Does the clawback affect GIS?
GIS is a separate income-tested benefit for low-income seniors that is reduced by 50 cents per dollar of other income (excluding OAS) — anyone in the OAS clawback zone is far above GIS eligibility.
Are eligible dividends worse for the clawback than interest?
Yes — eligible dividends are grossed up by 38% before the net-income test, so $10,000 of dividends counts as $13,800 even though the dividend tax credit lowers the tax itself.
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