The OAS Clawback in 2026: The 15% Surtax Nobody Plans For
By Jordan Ellis · Published · Reviewed
Quick Answer
For 2026 income, OAS is clawed back at 15 cents per dollar of net income above $95,323 (the threshold was $93,454 for 2025), and disappears entirely at about $155,000 for ages 65 to 74. That's a 15% surtax stacked on top of your marginal rate — but it only counts *taxable* income, so TFSA withdrawals never trigger it while RRSP/RRIF withdrawals always do. Where you draw retirement income from decides whether you keep your OAS.
The OAS clawback is the highest effective marginal tax rate most Canadian retirees will ever face — and it doesn’t show up in any tax bracket table.
How it works
For every dollar of net income above $95,323 (2026; it was $93,454 for 2025), you repay 15 cents of OAS. Full OAS ($751.97/month for ages 65 to 74 in July to September 2026, about $9,000 a year) is gone at about $155,000 of 2026 income. The repayment isn’t a bill — it’s withheld from your OAS payments starting the July after you file.
Stacked on a ~43% marginal rate (Ontario, ~$100k), clawback-zone income faces an effective ~58% marginal rate. Model your actual benefit with the CPP & OAS calculator.
What counts — and what doesn’t
| Income source | Triggers clawback? |
|---|---|
| RRSP/RRIF withdrawals | Yes |
| CPP, workplace pensions, salary | Yes |
| Interest, dividends, capital gains (taxable part) | Yes |
| TFSA withdrawals | No |
| Return of capital, GIS | No |
That single TFSA row is why the RRSP vs TFSA decision can’t be made on working-years tax rates alone — the retirement-side clawback flips the math for many households.
Five legitimate ways to keep your OAS
- Draw down RRSPs before 65. Income in your early-60s gap years is clawback-free territory (no OAS to claw back yet). Melting down RRIF-bound balances early also shrinks forced minimum withdrawals later.
- Split pension income. Up to 50% of eligible pension income to a lower-income spouse — the clawback is individual, so two $80,000 incomes beat one $160,000 by the entire OAS amount.
- Feed the TFSA in retirement. RRIF withdrawals you don’t need can move into TFSA room; future draws from there are invisible to the clawback.
- Delay OAS to 70 if your 65–69 income is high. You’d lose it to clawback anyway; waiting pays 36% more and pushes the full-clawback point to roughly $160,000+.
- Watch capital gains years. Selling a rental property or large non-registered position spikes net income for one year and erases that year’s OAS — time big disposals before 65 or spread them.
The planning bottom line
The clawback doesn’t punish wealth — it punishes concentrated taxable income in the wrong account type. A couple drawing $70,000 each from a blend of TFSA and RRIF keeps every dollar of OAS; a single retiree forced to pull $140,000 from a RRIF loses all of it. The account you fill at 40 decides the OAS you keep at 70 — run the combined benefit picture on the CPP & OAS calculator and the after-tax account comparison on the RRSP vs TFSA calculator.
Official sources
Rules and dollar limits change. Confirm current amounts with the official pages below before you act · Last reviewed .
- OAS pension recovery tax (clawback) (Employment and Social Development Canada)