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CPP vs OAS: Understanding Your Government Retirement Benefits

Updated

The Canada Pension Plan (CPP) and Old Age Security (OAS) are the two main federal retirement benefits, and you can receive both. CPP depends on what you earned and contributed while working; OAS depends on how long you lived in Canada after 18. This page compares them. It is part of the Canada Pension Plan hub; OAS has its own OAS hub.

CPP vs OAS at a glance

CPP retirement pensionOAS pension
Based onYour earnings and contributionsYears lived in Canada after 18
StartAny age from 60 to 70Any age from 65 to 70
Waiting past 650.7% more a month, up to 42% at 700.6% more a month, up to 36% at 70
Starting before 650.6% less a month, down to 36% less at 60Not possible
Maximum at 65$1,507.65 a month (pension starting in January 2026)$762.50 a month (October to December 2026), 10% more from 75
TaxableYesYes
Reduced at higher incomesNoYes, by the OAS recovery tax above $93,454 of net income (2025 income)
Indexed to inflationEach JanuaryEach quarter

Sources: Service Canada, CPP retirement pension; Service Canada, OAS payment amounts.

How much they add up to

At the maximums (CPP starting in January 2026, OAS for October to December 2026), CPP and OAS from 65 come to $2,270.15 a month. With the average new CPP retirement pension ($858.34 in July 2026) and a full OAS pension, the total is $1,620.84 a month. OAS is less than the maximum with fewer than 40 years in Canada after 18 (partial OAS), and CPP depends on your own record (CPP calculator).

People with a low income may also get the Guaranteed Income Supplement, a tax-free, income-tested payment on top of OAS; CPP counts as income for it. What the three public benefits add up to on their own is in living on CPP, OAS and GIS.

How each one works

CPP is a contributory pension: you and your employer pay in while you work, and the pension reflects your earnings up to the yearly maximum over your working life, with your lowest years dropped out (why your CPP may be less than you expected). It also pays disability, survivor, children’s and death benefits.

OAS is paid to people 65 and older who meet the residence rules: 10 years in Canada after 18 to qualify, and 40 years for the full pension (who can get OAS has the full rules). It doesn’t depend on work history. At higher incomes it is reduced by the recovery tax, 15% of net income above the threshold.

Deciding when to start each

Both can be delayed to 70 for a larger monthly amount, and the decisions are separate: you can start one and delay the other. CPP’s increase for waiting is larger per month than OAS’s, and only CPP can start before 65. CPP at 60 vs 65 vs 70 and OAS deferral cover each choice, and delaying CPP until 70 shows the four combinations of starting each at 65 or 70.

Tax

Both are taxable income, reported on T4A(P) (CPP) and T4A(OAS) slips. Other income affects them differently:

Income sourceTaxable?Counts for the OAS recovery tax and the GIS?
CPPYesYes
OASYesOAS recovery tax: yes; GIS: no
RRSP and RRIF withdrawalsYesYes
TFSA withdrawalsNoNo
Capital gainsHalf of the gainThe taxable half
Eligible dividendsThe grossed-up amountThe grossed-up amount; for the GIS, three times any federal dividend tax credit above the tax otherwise payable is then deducted, which can take off more than the whole gross-up

Is CPP taxable? covers tax on CPP, withholding and pension sharing.

Sources

The figures and rules on this page come from these sources, last checked against them between September 5, 2026 and September 29, 2026. How we check facts.