Is OAS Taxable? A Plain Answer With a Worked Retiree Example

Yes. OAS is taxable income. Service Canada reports it on a T4A(OAS) slip, and it is added to your other income when you file your return. If your own net income is above a threshold set by the Government of Canada, part of your OAS may also be repaid through the recovery tax, often called the clawback.

How OAS is taxed and where it shows up on your return

The Government of Canada describes the Old Age Security pension as taxable income. Each year, Service Canada issues a T4A(OAS) slip showing what was paid, and the amounts on it are copied onto your tax return. The slip is not required to be sent until the end of February, and it can also be viewed through CRA My Account or My Service Canada Account. The table below shows the boxes most retirees look at and where each one goes.

Source: Government of Canada, T4A(OAS), Statement of Old Age Security, Line 11300, Old age security (OAS) pension and Line 11400, CPP or QPP benefits, checked on October 26, 2026.

One detail that causes confusion is that the OAS pension is not the only amount on the slip. According to the Government of Canada, the Guaranteed Income Supplement, the Allowance and the Allowance for the Survivor are not considered taxable income, while the OAS pension is. The supplements still appear in box 21 of the slip, are entered on the return, and may be deducted on a separate line. If you receive only the OAS pension, box 18 is the figure to focus on.

Withholding and voluntary tax deductions

For residents of Canada, the Government of Canada says taxes are not automatically deducted from CPP or OAS payments. If you choose not to ask for monthly deductions, you may owe income tax when you file your return, and that can come as a surprise in the first year of payments. Some retirees prefer to keep the full payment and set money aside on their own, while others like the steadiness of having tax taken off each month. Both approaches can work, and the right one may depend on your other income and on whether you already pay tax instalments.

You can start, change or stop a voluntary federal or provincial tax deduction at any time in My Service Canada Account, under Profile and then Manage voluntary income tax deductions on your OAS dashboard. You can also complete Service Canada's form ISP3520OAS, which asks how much income tax you would like deducted from your OAS pension. Tax taken off this way is shown in box 22 of your T4A(OAS) slip and is claimed on your return as tax already paid. It can reduce what you owe at filing time, but it does not change whether OAS is taxable. Sources: Government of Canada, Managing your taxes, Old Age Security in MSCA and Request for Voluntary Federal Income Tax Deductions, ISP3520OAS, checked on October 26, 2026.

How OAS stacks with CPP, RRIF and pension income

OAS rarely arrives on its own. Most retirees also have CPP, and many add a workplace pension, RRIF withdrawals or investment income. Each source is reported on its own line, and then everything is added together before tax is calculated. The table below is a hypothetical, simplified illustration of that stacking for a single retiree. The amounts are round numbers chosen only for this example.

Hypothetical example for illustration only. It ignores deductions and credits, is not a prediction, and is not tax advice. The threshold shown is the Government of Canada figure for 2025 income, checked October 26, 2026.

Because the sources are added together, OAS is taxed at the same rates as the rest of your income, and those rates depend on your total income and your province. A small change in one source, such as a larger RRIF withdrawal, can change the tax on the others. The recovery tax test is also personal. The Government of Canada applies it to your individual net income, not to a couple's combined income, so two spouses with the same household total can see different results.

Where the clawback line starts

The clawback is a separate question from whether OAS is taxable. OAS is taxed as ordinary income, and then, if your own net income is above a yearly threshold, a recovery tax may also be deducted from your OAS payments. The threshold is indexed each year. The table below lists the minimum threshold from the Government of Canada, which is where repayment can begin, along with the rate applied to income above it. The full detail, including the maximum thresholds and a worked repayment example, sits in our post on the OAS clawback.

Source: Government of Canada, Old Age Security pension recovery tax, modified September 29, 2026, and Repayment of Old Age Security pension, checked on October 26, 2026.

The income on your return for one year sets the deduction for the following July to June period. The amount is spread across the monthly payments instead of being collected as a lump sum, and Service Canada sends a letter describing any deduction. Depending on your income, you may be below the threshold and see no recovery tax. If you are somewhere near it, that is a good reason to look at the numbers before the first payment arrives rather than after.

What to look at before turning 65 or 70

Before turning 65, it may help to estimate what your net income could look like in your first few years of OAS. That means looking at CPP, any workplace pension, RRIF withdrawals and investment income together, because RRIF minimums rise with age and can push taxable income higher even when spending stays the same. Our table of RRIF withdrawal rates by age shows how the required minimum climbs. It is also worth deciding whether to ask for tax to be deducted from OAS, and how much, so the first filing season is not a surprise.

The Government of Canada says OAS can start at age 65 or as late as age 70, and that starting later means larger monthly payments. We cover the mechanics and trade offs in our post on deferring OAS. Delaying can keep OAS out of net income in earlier years, but it does not change the threshold or lower your other income, and a larger payment later may still be exposed if income stays high. Pension income splitting may change each spouse's net income, which is covered in our post on pension income splitting in Canada. The Government of Canada also notes there is no reason to wait if you are eligible for the Guaranteed Income Supplement. Source: Government of Canada, When to start your retirement pension, checked on October 26, 2026.

A single answer to "is OAS taxable" is easy. How it fits into your own income picture is harder, because CPP and OAS start dates, RRIF minimums, pension income and a spouse's income all move together. In a scenario model we can place those pieces side by side, adjust the assumptions in real time, and see which years sit close to the threshold and what each change could trade away. How our process works describes the first 30 minute conversation, and our page on who we help describes the retirees we tend to work with. If you would like to talk it through, we would be glad to set up a conversation with no pressure.

For related reading, see our guide to when to take CPP and OAS, our guide to RRSP and RRIF withdrawal strategy, what the maximum CPP retirement benefit is and our approach to investment management.

Reviewed October 26, 2026. Figures come from Government of Canada pages and can change, so please confirm the current amounts on canada.ca before relying on them.

This content is for general information only and is not personalized tax, legal, or financial advice. OAS rules, thresholds and rates are published by the Government of Canada and are subject to change. Examples are hypothetical and for illustration only. For advice tailored to your situation, speak with a qualified professional.