OAS Clawback Calculator
Calculate how much of your Old Age Security will be clawed back based on your income.
tl;dr
The OAS clawback reduces your benefit by 15 cents for every dollar of net income above the threshold ($93,454 in 2025). This adds 15% to your marginal tax rate in the clawback zone. Seniors 75+ get 10% higher OAS, so they hit full clawback at a higher income. OAS is also prorated if you have less than 40 years of Canadian residency after age 18 (minimum 10 years required for eligibility).
OAS Clawback Calculator
Enter your income details to calculate your OAS clawback.
The OAS recovery tax claws back 15 cents per dollar of net income above the threshold.
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Why OAS Clawback Matters
Old Age Security is a significant source of retirement income for most Canadians, providing up to $7,707 annually (2024 rates) starting at age 65. However, the OAS clawback can reduce or eliminate this benefit entirely for higher-income retirees. The clawback creates an effective marginal tax rate increase of 15% on top of regular federal and provincial taxes. For someone in a 40% tax bracket facing OAS clawback, their effective marginal rate becomes 55% - meaning they keep only 45 cents of every additional dollar earned. This makes the clawback zone one of the highest-taxed income ranges in Canada. Understanding OAS clawback is critical for retirement income planning. Many strategies can minimize or avoid clawback: delaying OAS to age 70 (when clawback thresholds are more favorable), using TFSA instead of RRSP for savings, income splitting with a spouse, and strategic RRIF withdrawal planning. The clawback affects income between roughly $87,000 and $141,000 (2024 figures, indexed annually), which encompasses many middle to upper-middle-class retirees. Proper planning can save thousands of dollars annually in recovered OAS benefits.
What Counts as Net Income for OAS Clawback?
OAS clawback uses Line 23400 (net income before adjustments) from your tax return. Understanding what's included helps you plan withdrawals strategically.
Counts Toward Clawback
- • Employment income
- • CPP/QPP benefits
- • RRSP/RRIF withdrawals
- • Pension income (DB, DC)
- • Investment income (interest, dividends, capital gains)
- • Rental income
- • OAS itself (yes, it's circular)
Doesn't Trigger Clawback
- • TFSA withdrawals
- • GIS payments
- • Inheritances
- • Gifts received
- • Life insurance payouts
- • Lottery winnings
Planning tip: Prioritizing TFSA withdrawals over RRIF withdrawals in retirement can help you stay below the clawback threshold.
How OAS Clawback Is Calculated
The OAS clawback is calculated using a specific formula based on your net world income:
- 1. Determine Net Income: Your net income is line 23600 on your tax return. This includes employment income, pension income, RRIF withdrawals, CPP, dividends, capital gains (the taxable 50%), and foreign income. It excludes TFSA withdrawals and GIS benefits.
- 2. Check the Threshold: For 2024, the OAS clawback threshold is $86,912 (indexed annually). If your net income is below this threshold, you have no clawback. Above this threshold, clawback begins.
- 3. Calculate Excess Income: Subtract the threshold from your net income. For example, if your income is $100,000, your excess is $100,000 - $86,912 = $13,088.
- 4. Apply 15% Recovery Rate: The clawback is 15% of your excess income. In our example: $13,088 × 15% = $1,963.20 annual clawback.
- 5. Full Clawback Point: OAS is fully clawed back when your income reaches approximately $141,917 (2024). At this point and above, you receive no OAS benefits.
- 6. Monthly Recovery: The clawback is recovered through reduced monthly OAS payments the following year. If your annual clawback is $1,963, your monthly OAS is reduced by about $164.
OAS Clawback Thresholds
| Income Year | Threshold | Full Clawback (65-74) | Full Clawback (75+) |
|---|---|---|---|
| 2024 | $90,997 | $148,451 | $154,196 |
| 2025 | $93,454 | $152,062 | $157,923 |
| 2026* | $95,323 | $154,708 | $160,647 |
* 2026 figures are CRA estimates. Final amounts will be confirmed in October 2025.
Common Questions
Can I avoid OAS clawback by delaying OAS to age 70?
Delaying OAS doesn't avoid clawback directly, but it can help strategically. By delaying, you receive 42% more OAS (7.2% increase per year of delay). This higher benefit means you can afford to lose more to clawback and still come out ahead. Plus, you can spend down RRSPs before starting OAS, potentially lowering your income in OAS years.
Do TFSA withdrawals count toward OAS clawback?
No! TFSA withdrawals are not included in net income, so they don't trigger OAS clawback. This makes TFSAs incredibly valuable for retirees at risk of clawback. Withdrawing $30,000 from a TFSA has zero impact on OAS, while withdrawing the same from an RRSP increases clawback by $4,500 (15% of $30,000).
Can I split income with my spouse to reduce clawback?
Yes! Pension income splitting allows you to allocate up to 50% of eligible pension income to your spouse for tax purposes. This can lower the higher-earning spouse's income below the clawback threshold while keeping the lower-earning spouse below it too. CPP can also be shared. Proper income splitting can save thousands in combined taxes and clawback.
What happens if I'm just over the threshold?
Even $1 over the threshold triggers clawback. This creates a harsh "cliff effect" where earning slightly more can cost more than you gain. For example, earning an extra $1,000 over the threshold costs you $150 in OAS plus taxes on that $1,000. This is why strategic RRSP withdrawals and tax planning are crucial around the threshold.
Is OAS clawback permanent?
No, it's recalculated annually based on the previous year's income. If your income drops below the threshold in future years, your full OAS is restored. This makes OAS clawback different from other "clawbacks" - it's really an annual income test.
Strategies to Minimize OAS Clawback
- ✓Maximize TFSA Usage: Prioritize TFSA savings and withdrawals in retirement since they don't count toward the clawback threshold.
- ✓Strategic RRSP Withdrawals: Consider withdrawing more from RRSPs before age 65 to reduce mandatory RRIF withdrawals later that could trigger clawback.
- ✓Delay OAS to Age 70: If you have other income sources, delaying OAS increases your benefit by 42% and can offset future clawback.
- ✓Income Split with Spouse: Use pension income splitting to balance income between spouses and keep both below the clawback threshold.
- ✓Consider CPP Sharing: CPP sharing can redistribute CPP income between spouses for tax purposes, potentially helping both avoid clawback.
- ✓Plan Capital Gains Timing: Since 50% of capital gains count toward income, carefully time large investment sales to avoid pushing into clawback territory.
- ✓Use Prescribed Rate Loans: For investment income, consider prescribed rate loan strategies to attribute income to a lower-earning spouse.