Is OAS Taxable in Canada?

This page covers how Old Age Security is taxed: as regular income, with optional withholding, plus the separate recovery tax on high incomes, and non-resident tax if you live abroad. OAS in general is covered in the OAS guide.

OAS is taxable income

(Sources: CRA, line 11300; CRA, T4A(OAS).)

How much tax depends on your other income. As an example, the maximum OAS of $9,150 a year (October to December 2026 rate, ages 65 to 74) at a 20% marginal rate means about $1,830 of tax; at 30%, about $2,745.

Having tax withheld

Service Canada doesn’t deduct income tax from OAS unless you ask. You can request voluntary federal tax deductions through My Service Canada Account or with form ISP-3520 (Request for voluntary federal income tax deductions). If you don’t, you may owe tax when you file, and if the tax you owe at filing is large enough, the CRA may ask you to pay quarterly instalments.

The clawback (recovery tax)

On top of income tax, a recovery tax applies if your net income is above $93,454 (2025 income): 15% of the excess, up to the whole pension. It is withheld from your monthly OAS from July based on your earlier income, shown on your T4A(OAS), and settled on your return (line 23500). If your income has dropped, Form T1213(OAS) asks the CRA to reduce the withholding. The rules, and ways to reduce it, are in the OAS clawback guide, and the clawback calculator gives your figure.

If you live outside Canada

• Non-resident tax. OAS paid to a non-resident has non-resident tax deducted: 25%, or a lower rate if your country has a tax treaty with Canada.
• Treaties that tax OAS only where you live. Under some treaties, including Canada’s treaty with the United States, OAS paid to residents of that country is taxable only there, so Canada doesn’t withhold tax.
• The OAS Return of Income. Non-residents who receive OAS generally must file an OAS Return of Income by April 30 each year so the recovery tax can be worked out; if it isn’t filed, OAS payments are suspended from July. Residents of the countries on the CRA’s treaty list (42, including the United States, the United Kingdom, Australia and Mexico) don’t have to file.

(Sources: CRA, OAS Return of Income; CRA guide T4155.)

Whether you can receive OAS abroad at all depends on your years of residence; see am I eligible for OAS?.

OAS compared with other retirement income

Related resources

• How to reduce taxes in retirement
• Pension income splitting
• Working while collecting OAS
• Income tax calculator