OAS Clawback Estimator

What the calculator estimates

This calculator estimates how much of an annual OAS amount may need to be repaid because of income. This repayment is commonly called the OAS clawback and is separate from ordinary income tax and tax already withheld.

The estimate uses the selected income year, income for OAS recovery tax and the annual OAS amount subject to recovery. When the entered amounts include supplements, the result identifies the combined repayment. It does not determine a final tax-return balance.

Calculation method

Income for OAS recovery tax starts with net income before adjustments (line 23400 of the tax return), including OAS already reported. The optional calculation subtracts EI benefits repayment, UCCB income and RDSP income, and adds back UCCB repayment and the RDSP repayment portion of line 23200. It is not taxable income or take-home pay. A separate annual-benefit calculation uses OAS pension, overpayment recovered and net supplements from T4A(OAS).

R is estimated repayment; B is the annual OAS or combined OAS-and-supplement amount subject to repayment; r is the recovery rate; I is income for OAS recovery tax; and T is the selected year's threshold. The ordinary recovery rate is 15%.

If income does not exceed the threshold, the estimated repayment is zero. Otherwise, the recovery rate applies to income above the threshold, up to the annual benefit amount subject to repayment.

The annual amount reflects any relevant overpayment adjustments entered. When OAS and supplements are included, the repayment is shown for the combined amount rather than allocated to OAS alone.

A is OAS remaining after recovery tax for a pension-only estimate. The same subtraction gives the combined benefit amount remaining after repayment when supplements are included.

Illustrative example

Assume income for OAS recovery tax of $110,000, an annual pension-only amount subject to recovery of $9,000, and a hypothetical $100,000 threshold chosen to simplify the arithmetic. This is not the threshold for a particular income year; there are no supplement or overpayment adjustments in this example.

Estimated repayment is $1,500.00, leaving $7,500.00 before ordinary income tax. The amount actually deposited or still owing on a tax return may differ.

Understanding the result

The main result is the estimated recovery tax or combined repayment. Details show the income, threshold, rate, amount subject to repayment and amount remaining. The corresponding withholding period does not mean this calculator has determined deductions from each pension payment.