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OAS recovery tax starts at a net income of $95,323 for the 2026 tax year, and it takes back 15 cents of every dollar above that. Each person is tested alone, never as a couple. That’s why a pair with $95,000 and $20,000 of income can cut their 2026 tax by about $4,800 if the higher earner moves $30,000 of eligible pension income to the other.
At what income does the OAS clawback start?
It depends on the income year, so two figures matter right now. Your July 2026 to June 2027 payments are based on your 2025 income, with a threshold of $93,454. Your 2026 income sets payments from July 2027 to June 2028, and its threshold is $95,323 as Service Canada lists it. The pension is repaid in full at $155,320 for ages 65 to 74 and $161,320 from age 75, on the 2026 figures. The Service Canada: OAS recovery tax page carries the current table.
| Income year | Payments affected | Threshold |
|---|---|---|
| 2025 | July 2026 to June 2027 | $93,454 |
| 2026 | July 2027 to June 2028 | $95,323 |
How much is the OAS recovery tax on $105,000?
About $1,452. You repay 15% of the amount over the threshold, and $105,000 of 2026 net income is $9,677 above $95,323. Service Canada takes the repayment out of your monthly OAS over the following July to June, and your tax return shows it as a deduction. At $95,000 you’re under the line for 2026 and owe nothing. The same $95,000 in 2025 would have $232 held back from the 2026 to 2027 year, since that year’s threshold is lower. The OAS calculator runs your own figures.
How fast does the age amount disappear?
The federal age amount is $9,208 for 2026, reduced by 15% of net income above $46,432, and it reaches zero at about $107,819. You must be 65 or older by 31 December to claim it. At the 14% federal rate it’s worth up to about $1,289.
| Net income | Age amount left |
|---|---|
| $46,432 or less | $9,208 |
| $60,000 | $7,173 |
| $75,000 | $4,923 |
| $95,000 | $1,923 |
| $107,819 or more | $0 |
The figures come from the Canada Revenue Agency: indexed amounts for 2026 page. Between those two points the credit falls by about 2 cents for every dollar of income, a hidden extra tax on top of your bracket.
How does pension splitting fix a $95,000 income?
Splitting moves up to half of your eligible pension income to your spouse or common-law partner on the tax return, which lowers your net income and raises theirs. Both spouses sign Form T1032. The Canada Revenue Agency: pension income splitting page lists the eligible income.
An Ontario estimate from the site engine for 2026. Spouse A is 72 with $95,000 of net income, $60,000 of it eligible pension income. Spouse B is 70 with $20,000. A moves $30,000 over. The engine applies the federal credit amounts to both federal and provincial tax, so Ontario’s own smaller credits would trim the saving a little.
| Before splitting | After moving $30,000 | |
|---|---|---|
| Spouse A net income | $95,000 | $65,000 |
| Spouse B net income | $20,000 | $50,000 |
| Spouse A tax | $19,197 | $9,295 |
| Spouse B tax | $0 | $5,133 |
| Combined tax | $19,197 | $14,428 |
The household saves about $4,769. B’s income was taxed at almost nothing, and A’s top slice was taxed at over 30%. If A’s income were $105,000 instead, moving the same $30,000 would also wipe out the $1,452 clawback. Try the pension income splitting calculator. Splitting doesn’t work on CPP or OAS, so check what counts on the retirement income and benefits page, and see the retiring life event page for the wider picture.
What is the pension income amount?
A federal credit on up to $2,000 of eligible pension income, worth up to $280 at 14%. At 65 and older it covers income from a registered pension plan, a RRIF, annuity payments and some other registered plan income. CPP, QPP and OAS don’t count. A spouse who receives split pension income can claim it on the amount received. With no workplace pension, a small RRIF withdrawal after 65 can use it up.
What changes when you turn 75?
The OAS pension rises by 10% permanently. For October to December 2026 the maximum monthly amount is $762.50 for ages 65 to 74 and $838.75 for 75 and older. The higher payment raises the repayment ceiling, as shown above, but the 15% rate and the starting threshold are the same for everyone.
What can you still do about it before the end of 2026?
Net income is the number that counts, so year-end moves come down to what lands on the return. A big RRSP or RRIF withdrawal, a taxable capital gain or a lump-sum pension payout all raise net income and can push you past $95,323 in the last weeks of the year. TFSA withdrawals aren’t income, so they’re a cleaner source of cash if you’re near the line. The pension splitting election is made when you file, so you can run the numbers in March or April 2027 and still choose the best split for 2026. The threshold for the 2027 income year isn’t published yet. Plan with this year’s figure and check the Service Canada page in the new year. The retirement income tax calculator shows how a withdrawal changes your tax.
Where does this information come from?
Thresholds come from Service Canada and Canada Revenue Agency pages on the OAS recovery tax, indexed amounts, the pension income amount and pension income splitting. Dollar examples come from the site engine and are estimates. Checked in October 2026. This is an independent information site: we provide no services, we do not represent the CRA or any organization, and we do not guarantee that anything here is accurate or current. We accept no liability for decisions based on it. Check the official source before you rely on it. See the full disclaimer.
Frequently asked questions
Does my spouse's income affect my OAS clawback?
No. The recovery tax uses your own net income only. A spouse with a high income doesn't reduce your OAS, and a spouse with $20,000 doesn't help you. Pension splitting changes each person's net income, which is why it can matter.
Can I stop the clawback from being withheld?
You can ask Service Canada to reduce the withholding if your income will fall, say after you retire or move income to a spouse. Otherwise the repayment comes out of your payments and gets reconciled with your tax return.
Do I lose the age amount if my spouse has a high income?
No. The age amount depends on your own net income, which is also why splitting helps when one spouse is much higher. If you can't use all of your age amount, you can transfer the unused part to a spouse.
Is OAS still worth taking at 65 if I will pay the clawback?
Usually yes. The clawback takes 15 cents of each dollar above the threshold, so you keep 85 cents of every dollar over it until the pension is gone. Whether to delay the pension is a separate decision with its own math.