What is the OAS pension recovery tax?
The Old Age Security (OAS) pension is a federal benefit for seniors. If your net world income exceeds a threshold, you must repay part or all of your OAS pension. This repayment is collected as a monthly recovery tax, administered by the Canada Revenue Agency (CRA).
Who must pay the recovery tax?
You must pay the recovery tax if both conditions apply:
- Your annual net world income is more than the threshold (e.g., $93,454 for 2025).
- You live in a country where the non-resident tax on Canadian pensions is 25% or more.
If you live in a country where the non-resident tax is lower than 25%, you do not need to file the OAS Return of Income form.
Income thresholds
The official table shows thresholds and maximum income limits for different periods (in Canadian dollars):
| Recovery tax period | Income year | Minimum threshold | Maximum (age 65-74) | Maximum (age 75+) |
| --- | --- | --- | --- | --- |
| July 2025 - June 2026 | 2024 | 90,997 | 148,451 | 154,196 |
| July 2026 - June 2027 | 2025 | 93,454 | 152,062 | 157,923 |
| July 2027 - June 2028 | 2026 | 95,323 | 155,109 | 161,088 |
Note: From January to September of the current tax year, amounts are estimates based on maximum OAS amounts. From October to December, amounts are final.
How to calculate the repayment
The repayment is 15% of the amount by which your income exceeds the threshold.
Example: For 2025, threshold is $93,454. If your income is $100,000, the repayment is 15% of ($100,000 - $93,454) = $981.90.
This calculation is for reference only. For accurate amounts, refer to the T4155 guide.
How to file
In January, you receive:
- An OAS Return of Income form to fill out.
- An NR4 OAS information slip showing amounts paid and taxes deducted.
Enter the amounts from the NR4 slip on the form, and report the repayment on line 23500. Send the form to the CRA by April 30 to avoid interruption of payments. If the CRA does not receive it, payments stop in July.
How the recovery tax is deducted
Once the form is received, the CRA estimates your repayment for the next tax year and deducts it monthly from your OAS payments. You will receive a letter about any deductions.
If deductions cause financial hardship
You can ask the CRA to review your situation.
Non-residents
If you live outside Canada and receive OAS, you must also pay non-resident tax, deducted monthly. The total of non-resident tax and recovery tax cannot exceed your OAS benefits.
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