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Worked out as you move the sliders and not saved. 2026 dollars.
Your OAS recovery tax
Net income including OAS is $119,150, which is $23,827 over the threshold. You repay 15 cents of OAS for every extra dollar of income, on top of regular tax. All of it is repaid at about $156,323 of net income including OAS. To avoid the recovery tax you would need to lower net income by about $23,827.
OAS you keep each year, by net income (excluding OAS)
The red line marks your net income after deductions. Income above $86,173 (before OAS) starts the recovery tax; it reaches 100% near $147,173.
How this is worked out, and how GIS fits in
The OAS recovery tax is 15% of your net income (including the OAS itself) above $95,323, and can never be more than the OAS you received. It is worked out on one person's income, not the couple's. In real life it is based on last year's income and taken out of your OAS payments from July to June.
Ways people lower it: RRSP or RRIF deductions, splitting eligible pension income with a spouse, keeping investments in a TFSA (withdrawals do not count), and timing large gains. GIS is the other direction: it is for lower incomes, does not count OAS as income, is not taxable, and does not form part of the income used for the OAS recovery tax. So at these income levels GIS is not in the picture.
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