OAS clawback Canada: 2026 threshold and withdrawal impact
By GrowThenDraw Editorial Team · Updated August 10, 2026 · 11 min read · Editorial policy
The Old Age Security recovery tax—often called the OAS clawback—links one calendar year's net world income to OAS payments in a later July-to-June period. That timing and the use of net income, rather than gross salary, are the two details most likely to cause planning errors.
The linked calculator begins with your own net-world-income estimate and annual OAS amount. It isolates a planned taxable withdrawal so you can see the OAS recovery caused by that decision. It does not calculate your tax return or recommend an income strategy.
The 2026 threshold and recovery period
For 2026 income, Service Canada publishes a minimum recovery threshold of $95,323. The resulting recovery applies to OAS payments from July 2027 through June 2028.
The current estimated income at which maximum OAS is fully recovered is $155,109 for ages 65 to 74 and $161,088 for age 75 and over. Service Canada notes that these upper thresholds are estimates from January through September and are finalized from October through December.
The recovery-tax formula
Subtract the minimum threshold from net world income. If the result is positive, multiply it by 15%. The recovery cannot exceed the OAS pension for the relevant period.
For example, $110,000 of 2026 net world income is $14,677 above the threshold. Fifteen percent is $2,201.55. That is the estimated recovery before checking the cap created by the actual OAS amount.
What belongs in net world income
The recovery test does not use salary alone. Taxable pension income, employment income, registered-plan withdrawals, investment income and foreign income can all affect net income. OAS itself is included in the net-world-income range.
For a Canadian resident, start from a careful estimate of net income on line 23600 rather than reconstructing the tax return inside a pension calculator. The page asks for income before a selected extra decision so it can compare the same return with and without that amount.
How an RRSP or RRIF withdrawal changes the result
A taxable RRSP or RRIF withdrawal can cross the recovery threshold or deepen an existing clawback. If base net income is $90,000 and a $20,000 withdrawal raises it to $110,000, the first $5,323 remains below the threshold and the remaining $14,677 creates $2,201.55 of estimated OAS recovery.
That recovery is separate from ordinary federal and provincial tax and separate from source withholding. Use the RRSP-withdrawal calculator for withholding and bracket-tax context, then use this page for the OAS layer. Combining the numbers requires a complete tax-return estimate.
Why the annual OAS input is editable
OAS payment amounts are reviewed quarterly, age 75 and over has a higher maximum, partial pensions can apply, and deferring OAS can increase the pension. A fixed annual maximum would therefore overstate precision.
The calculator starts with the annual amount implied by Service Canada's current estimated recovery range. Replace it with the annual OAS you reasonably expect for the July 2027 to June 2028 period. Service Canada's notice remains authoritative.
Important exclusions
The calculator does not determine OAS eligibility, residence history, partial-pension fractions, deferral increases, non-resident tax or treaty treatment, GIS, Allowance benefits, pension-income splitting, deductions, waiver requests or the precise amount withheld each month.
The displayed income reduction to restore full OAS is only the gap back to the threshold. It is not advice to make a contribution or defer income. Tax cost, contribution room, liquidity and long-term retirement income can outweigh the recovered OAS.