Short Answer
You can earn any amount and still receive OAS — there is no hard income limit. However, once your net income exceeds roughly $90,997 (2026 threshold, indexed annually), OAS begins clawing back at 15 cents per dollar of excess income.
OAS is completely clawed back at around $148,000–$151,000 of net income.
2026 OAS Clawback Thresholds
| Component | Amount |
|---|---|
| Clawback starts (net income) | ~$90,997 |
| Clawback rate | 15% of income above threshold |
| Full clawback (OAS = $0) | ~$148,000–$151,000 |
| Maximum monthly OAS (age 65–74) | ~$727 |
| Maximum monthly OAS (age 75+) | ~$800 |
The threshold is indexed annually by CRA. Check CRA or your NOA for the confirmed figure for the tax year in question.
How the Clawback Is Calculated
Formula: Clawback = (Net Income − $90,997) × 15%
Example A: Income just above threshold
| Item | Amount |
|---|---|
| Net income | $100,000 |
| Threshold | $90,997 |
| Excess income | $9,003 |
| OAS clawback | $9,003 × 15% = $1,350/year |
| Monthly OAS reduction | $112.50 |
| Monthly OAS remaining (~$727 max) | ~$614.50 |
Example B: High-income retiree
| Item | Amount |
|---|---|
| Net income | $130,000 |
| Threshold | $90,997 |
| Excess income | $39,003 |
| OAS clawback | $39,003 × 15% = $5,850/year |
| Monthly OAS reduction | $487.50 |
| Monthly OAS remaining | ~$239.50 |
Example C: Well below threshold
| Item | Amount |
|---|---|
| Net income | $75,000 |
| Clawback | None |
| OAS retained | Full amount |
What Counts as Net Income (and What Does Not)
| Income type | Counts toward clawback threshold? |
|---|---|
| Employment income | Yes |
| CPP retirement pension | Yes |
| Company/DB pension | Yes |
| RRSP withdrawals | Yes |
| RRIF withdrawals | Yes |
| Investment income (interest, dividends, capital gains) | Yes |
| Self-employment income | Yes |
| Rental income (net) | Yes |
| TFSA withdrawals | No — not income |
| GIS | No — excluded from clawback calc |
| Lottery windfalls (tax-exempt) | No |
TFSA withdrawals are the single most effective tool for retirees trying to stay under the OAS clawback threshold — they provide cash flow with no impact on net income.
How OAS Clawback Is Collected
| Method | Detail |
|---|---|
| CRA calculates your clawback liability on your tax return | Based on net income from line 23600 |
| If clawback is expected, CRA reduces future OAS payments in advance | Through Monthly Recovery Tax withholding |
| You file taxes and true up any balance | Excess repaid or refunded |
CRA typically sends a letter in advance if they expect a clawback in the upcoming year, adjusting OAS payments proactively. This is why some retirees see their OAS payment drop partway through the year.
Strategies to Protect OAS
| Strategy | How it helps |
|---|---|
| TFSA withdrawals instead of RRSP/RRIF | Zero impact on net income |
| Pension income splitting with spouse | Shifts income to lower net income for clawback purposes |
| RRSP meltdown before 65 | Draws down RRSP at lower marginal rate, reduces large RRIF withdrawals later |
| Delaying OAS to age 70 | +36% higher monthly amount; better if high-income years are 65–70 |
| Timing capital gains | Spread large disposals across tax years to stay below threshold |
| Corporate structure | Retiring allowance or corporate income management (complex — needs advisor) |
Should You Defer OAS?
Deferring OAS from 65 to 70 increases your monthly benefit by up to 36%. This can make sense if:
- Your income is high in your early retirement years (e.g., RRSP withdrawals, continuing to work)
- You expect lower income from 70+ due to stopped RRIF minimums or lower pensions
- You are in good health and expect a long retirement
See the OAS deferral guide for the full break-even analysis.
OAS vs. GIS: They Work Differently
| Feature | OAS | GIS |
|---|---|---|
| Income-tested? | Yes — high income | Yes — low income |
| Threshold | ~$90,997 | ~$0 of other income |
| Clawback rate | 15% | 50% |
| Employment exemption | None | $5,000 fully exempt |
| TFSA treatment | No impact | No impact |
OAS serves high earners with a high-income clawback. GIS serves low-income seniors with a low-income cap. They work in opposite directions on the income spectrum.
OAS for Canadians living outside Canada
Canadians who retire abroad can still receive OAS if they lived in Canada for 20+ years after age 18. Non-resident OAS recipients are subject to a 25% withholding tax (not the regular income tax clawback system):
| Situation | OAS treatment |
|---|---|
| Canadian resident | Subject to income tax + clawback if income >$90,997 |
| Non-resident (no tax treaty) | 25% withholding tax on OAS payments |
| Non-resident (tax treaty country — e.g., US) | Often reduced to 15% or 25% per treaty |
| Returned to Canada mid-year | Resident rules apply from return date |
The non-resident withholding approach means that Canadians retiring to low-tax jurisdictions (like Florida or Portugal) pay a flat withholding rate rather than full Canadian marginal rates — which can be advantageous for those with significant other income. Check the tax treaty between Canada and your destination country.