Definitions & How It All Connects | HJ Wu & Company Inc. (CPA)

How the pieces connect

Read left to right: what you enter, which benefit it feeds, which rule adjusts it, and the result. The dotted line means a condition: you only get GIS if OAS is being paid. Prefer words? The “if this, then that” table below says the same thing.

If this happens, then that

If…	…then	Try it
You start CPP before 65	Your monthly CPP is 0.6% smaller for each month early, up to 36% less at 60, for life.	CPP & OAS Timing
You start CPP after 65	It is 0.7% bigger for each month you wait, up to 42% more at 70. It also counts as more income, which can lower GIS.	CPP & OAS Timing
You wait to start OAS	It grows 0.6% a month, up to 36% at 70. While you wait you get no OAS and so no GIS.	CPP & OAS Timing
You turn 75	OAS goes up by 10%.	CPP & OAS Timing
You have fewer than 40 years in Canada	OAS is your years divided by 40 (nothing under 10 years). A smaller OAS also means less clawback risk.	OAS Clawback
Your CPP or other income goes up	GIS falls about 50 cents per dollar if you are single (about 25 cents each for a couple). Your CPP and OAS themselves do not fall.	CPP Survivor
Your net income including OAS is over $95,323	You repay 15 cents of OAS for every dollar over it, up to all of it. GIS has already stopped at income levels far below this.	OAS Clawback
You take money from a TFSA instead of an RRSP or RRIF	TFSA withdrawals are not income, so they add no clawback and do not reduce GIS.	Retirement Income
A partner dies	Their CPP and OAS stop. You keep your own OAS and CPP and may qualify for the CPP survivor's pension and children's benefits. A $2,500 death benefit goes to the estate. Your GIS is recalculated as a single person.	CPP Survivor
The survivor is 65 or older	The survivor's pension starts at 60% of the deceased's age-65 CPP, before combining with the survivor's own CPP.	CPP Survivor
The survivor is under 65	The survivor's pension is $238.17 plus 37.5%. With no dependent children, the flat part is reduced from 45 down to nothing at 35, and nothing is paid under 35.	CPP Survivor
The survivor also has their own CPP	The two are combined under Section 58 and the survivor's part is the lesser of Option A and Option B, which is often noticeably less than the headline figure. Delaying your own CPP keeps its bonus.	CPP Survivor
Your tax rate is higher now than it will be in retirement	An RRSP tends to come out ahead, because the refund today is worth more than the tax you pay on the way out, provided you reinvest the refund.	TFSA vs RRSP
Your tax rate is low today, or you may get GIS	A TFSA tends to win: you give up little tax now, and TFSA withdrawals do not reduce GIS, benefits or the age amount later.	TFSA vs RRSP
You withdraw from a TFSA	The room comes back on January 1 of the next year, not this year. Putting it back sooner can cause a 1% a month penalty.	TFSA Room
One spouse has most of the pension income and is 65 or older	Splitting up to half of eligible pension income can lower the couple's combined tax and the OAS clawback. The tax calculator shows the best split.	Income Tax
You expect a large capital gain	The alternative minimum tax counts all of the gain and allows only half of most credits, so it can add tax. The tax calculator shows when it applies.	Income Tax
The survivor is 60 to 64 with a low income	They may get the Allowance for the Survivor until 65, when OAS and GIS take over.	CPP Survivor
The survivor has a low income and gets a survivor's pension	The extra CPP counts as income, so GIS shrinks. The net gain is smaller than the pension itself.	CPP Survivor

If…

…then

Try it

You start CPP before 65

Your monthly CPP is 0.6% smaller for each month early, up to 36% less at 60, for life.

CPP & OAS Timing

You start CPP after 65

It is 0.7% bigger for each month you wait, up to 42% more at 70. It also counts as more income, which can lower GIS.

CPP & OAS Timing

You wait to start OAS

It grows 0.6% a month, up to 36% at 70. While you wait you get no OAS and so no GIS.

CPP & OAS Timing

You turn 75

OAS goes up by 10%.

CPP & OAS Timing

You have fewer than 40 years in Canada

OAS is your years divided by 40 (nothing under 10 years). A smaller OAS also means less clawback risk.

OAS Clawback

Your CPP or other income goes up

GIS falls about 50 cents per dollar if you are single (about 25 cents each for a couple). Your CPP and OAS themselves do not fall.

CPP Survivor

Your net income including OAS is over $95,323

You repay 15 cents of OAS for every dollar over it, up to all of it. GIS has already stopped at income levels far below this.

OAS Clawback

You take money from a TFSA instead of an RRSP or RRIF

TFSA withdrawals are not income, so they add no clawback and do not reduce GIS.

Retirement Income

A partner dies

Their CPP and OAS stop. You keep your own OAS and CPP and may qualify for the CPP survivor's pension and children's benefits. A $2,500 death benefit goes to the estate. Your GIS is recalculated as a single person.

CPP Survivor

The survivor is 65 or older

The survivor's pension starts at 60% of the deceased's age-65 CPP, before combining with the survivor's own CPP.

CPP Survivor

The survivor is under 65

The survivor's pension is $238.17 plus 37.5%. With no dependent children, the flat part is reduced from 45 down to nothing at 35, and nothing is paid under 35.

CPP Survivor

The survivor also has their own CPP

The two are combined under Section 58 and the survivor's part is the lesser of Option A and Option B, which is often noticeably less than the headline figure. Delaying your own CPP keeps its bonus.

CPP Survivor

Your tax rate is higher now than it will be in retirement

An RRSP tends to come out ahead, because the refund today is worth more than the tax you pay on the way out, provided you reinvest the refund.

TFSA vs RRSP

Your tax rate is low today, or you may get GIS

A TFSA tends to win: you give up little tax now, and TFSA withdrawals do not reduce GIS, benefits or the age amount later.

TFSA vs RRSP

You withdraw from a TFSA

The room comes back on January 1 of the next year, not this year. Putting it back sooner can cause a 1% a month penalty.

TFSA Room

One spouse has most of the pension income and is 65 or older

Splitting up to half of eligible pension income can lower the couple's combined tax and the OAS clawback. The tax calculator shows the best split.

Income Tax

You expect a large capital gain

The alternative minimum tax counts all of the gain and allows only half of most credits, so it can add tax. The tax calculator shows when it applies.

Income Tax

The survivor is 60 to 64 with a low income

They may get the Allowance for the Survivor until 65, when OAS and GIS take over.

CPP Survivor

The survivor has a low income and gets a survivor's pension

The extra CPP counts as income, so GIS shrinks. The net gain is smaller than the pension itself.

CPP Survivor

These are the general rules as modelled in the calculators. Your own facts can change the result, so run your numbers in the calculators.

Definitions

Show:

Canada Pension Plan (CPP)

In plain language: A monthly pension you earn by working and paying into CPP. It replaces part of your work income in retirement and also pays benefits to a survivor, to children and to people with a disability.

Technical: A contributory, earnings-related social insurance plan under the Canada Pension Plan Act, funded by employee, employer and self-employed contributions. Quebec residents are covered by the Quebec Pension Plan (QPP), which has its own rules and is not covered by these calculators.

Age-65 amount (calculated retirement pension)

In plain language: The monthly CPP you would get if you started at 65. It is the number on your My Service Canada Account and the starting point for the other calculations.

Technical: The monthly retirement pension worked out from your contribution record as if it began at age 65, before any early or late start adjustment. The survivor's pension is based on the deceased's age-65 amount, not on what they were actually collecting.

Start-age adjustment

In plain language: Starting CPP earlier makes your monthly amount smaller for life. Starting later makes it bigger. You can choose any time from 60 to 70.

Technical: Actuarial adjustment of -0.6% per month before 65 (maximum -36% at 60) and +0.7% per month after 65 (maximum +42% at 70).

Survivor's pension

In plain language: A monthly CPP benefit for the spouse or common-law partner of someone who has died, if that person paid into CPP for long enough. You have to apply for it.

Technical: Payable to the surviving spouse or common-law partner of a contributor who met the minimum contributory period. Survivor 65 or older: 60% of the deceased's age-65 amount. Under 65: flat-rate portion ($238.17 in 2026) plus 37.5%. As modelled here, not payable under 35 without dependent children, with the flat part phased in between 35 and 45. Disability is not modelled.

Combined benefit (Section 58)

In plain language: If you get your own CPP and a survivor's pension, they are combined into one payment and the survivor's part is trimmed. The result is often a survivor's pension noticeably smaller than the headline number.

Technical: Under section 58 of the CPP Act the survivor's portion becomes the lesser of Option A (the room left under the combined maximum after the survivor's own age-65 amount) and Option B (the survivor's pension reduced by 40% of the smaller of its earnings-related portion and the survivor's own age-65 amount). The combining is done before the start-age adjustment.

Combined maximum

In plain language: The ceiling on what your own CPP and a survivor's pension can add up to at 65 ($1,531.56 a month in 2026).

Technical: 2026 combined survivor and retirement maximum at 65: $1,531.56 per month (the retirement maximum is $1,507.65). It is applied before the start-age adjustment, so delaying past 65 can take the total above it.

Special adjustment

In plain language: If you took your own CPP early, part of what the combining rules trimmed off is protected from the early-start reduction, so you are not penalized twice.

Technical: Under s.46(5) the early-claim reduction applies to the retirement amount less the survivor reduction. Modelled here as an add-back of the reduction multiplied by (1 minus the start-age factor).

Children's benefit

In plain language: A monthly amount for each child of someone who has died (or has a disability) and paid into CPP.

Technical: Flat-rate benefit ($307.81 per month in 2026) for each dependent child under 18, or 18 to 25 in full-time school, of a deceased or disabled contributor.

Death benefit

In plain language: A one-time payment for the estate or whoever paid the funeral costs.

Technical: One-time lump sum of $2,500 if the contributor met the minimum contributory period; there are time limits to apply.

Old Age Security (OAS)

In plain language: A monthly pension from the federal government for most people 65 and older who have lived in Canada long enough. You do not need to have worked. It is taxable.

Technical: A non-contributory, residence-based, taxable pension under the Old Age Security Act, funded from general government revenue and indexed quarterly to the Consumer Price Index.

Years in Canada (residence)

In plain language: How long you have lived in Canada since turning 18. 40 years gives the full amount, fewer gives a proportion, and under 10 years gives none.

Technical: A full pension requires 40 years of residence after age 18. A partial pension is paid in 1/40ths (minimum 10 years). Credit from international agreements is not modelled.

OAS deferral

In plain language: You can wait up to five years (to age 70) to start OAS and get a bigger amount.

Technical: The pension increases by 0.6% for each month after 65 that it is delayed, to a maximum of 36% at 70.

Age 75 increase

In plain language: OAS goes up by 10% when you turn 75.

Technical: A 10% increase to the OAS pension applies from age 75 (introduced in July 2022).

OAS recovery tax (clawback)

In plain language: If your income is high you pay back some or all of your OAS on your tax return. It is 15 cents for every dollar over the threshold.

Technical: Repayment of 15% of net income above $95,323 (2026), never more than the OAS received. Based on net income including OAS; it is withheld from payments from July to June using the prior year's income.

Net income

In plain language: Your income on your tax return after deductions such as RRSP contributions. OAS counts toward it; TFSA withdrawals do not.

Technical: Net income for tax purposes from all sources worldwide, including OAS received and before the OAS repayment deduction.

GIS and the Allowances

Guaranteed Income Supplement (GIS)

In plain language: Extra tax-free money on top of OAS for people with low income. It never reduces your CPP or OAS. Your CPP and other income reduce your GIS.

Technical: An income-tested, non-taxable monthly supplement for OAS recipients with low income. Based on prior-year income excluding OAS and GIS (combined for couples). The regular amount falls about 50 cents per dollar of income for a single person, and about 25 cents per dollar of combined income for each partner in a couple.

GIS top-up

In plain language: An extra boost for the very lowest incomes that fades out faster than the rest of the GIS.

Technical: An additional amount that phases out over the first part of the income range. In these calculators it is modelled as the steeper first segment of the GIS reduction.

Income for GIS

In plain language: What counts: CPP, pensions, RRIF withdrawals, interest and (most of) work income. What does not: OAS itself, GIS and TFSA withdrawals.

Technical: Net income of the prior year excluding OAS and GIS. Part of employment and self-employment income is exempt (not modelled).

Allowance

In plain language: For a spouse or partner aged 60 to 64 of someone who gets GIS, when household income is low. It ends at 65 when OAS takes over.

Technical: A monthly income-tested benefit for ages 60 to 64 whose spouse or common-law partner receives GIS. Modelled with a maximum of $1,448.06 and a combined-income cut-off of $42,768.

Allowance for the Survivor

In plain language: For someone aged 60 to 64 whose partner has died, who has a low income and has not remarried. It ends at 65.

Technical: A monthly income-tested benefit for survivors aged 60 to 64, resident at least 10 years and not remarried or in a common-law relationship. Modelled with a maximum of $1,726.18 and an income cut-off of $31,152.

Single or couple (for GIS)

In plain language: With a partner, GIS looks at household income. If a partner dies you are treated as single, which changes the maximum and the cut-offs.

Technical: Separate benefit tables apply for single or widowed, a partner who receives OAS, and a partner who does not receive OAS or an Allowance.

Tax and savings accounts

Tax-Free Savings Account (TFSA)

In plain language: An account where growth and withdrawals are never taxed. You put in money you have already paid tax on, so there is no refund. Withdrawals are not income, so they do not affect benefits.

Technical: A registered account under the Income Tax Act for residents 18 or older. Contributions are not deductible; income and withdrawals are not taxable and are not counted in net income for the OAS recovery tax, GIS or income-tested benefits. The 2026 annual limit is $7,000.

TFSA contribution room

In plain language: The total you are allowed to put in. You earn new room each January 1 from age 18. Unused room carries forward, and withdrawals are added back the next January 1.

Technical: Cumulative room = annual limits since the later of 2009, the year you turned 18 and the year you became resident, less contributions, plus withdrawals made in earlier years. Contributions over the room are taxed at 1% a month on the excess.

Registered Retirement Savings Plan (RRSP)

In plain language: An account where contributions give you a tax refund now and everything you take out later is taxed as income. The deadline for 2026 is March 1, 2027.

Technical: A registered plan with a deduction limit of 18% of prior-year earned income to a dollar maximum ($33,810 for 2026) plus unused room. Withdrawals are fully taxable; the plan must convert to a RRIF or annuity by the end of the year you turn 71.

Marginal and average tax rate

In plain language: Your marginal rate is the tax on your next dollar. Your average rate is your total tax divided by your total income. Decisions about RRSPs and extra income depend on the marginal rate.

Technical: Marginal rate: the change in combined federal and provincial tax (and in the OAS recovery tax) for a small increase in ordinary income. Average rate: total tax over total income.

Dividend tax credit

In plain language: A credit that makes up for tax the company has already paid on the profit it pays out as a dividend, so dividends are taxed less than interest.

Technical: Dividends are grossed up (38% eligible, 15% other) and a federal and provincial credit, expressed as a percentage of the grossed-up amount, is deducted from tax.

Alternative minimum tax (AMT)

In plain language: A second calculation that makes sure people with large gains or deductions still pay a minimum. If it is higher than your regular tax, you pay the difference, and you can usually get it back over seven years.

Technical: Federal rate of 20.5% on adjusted taxable income above an exemption equal to the start of the fourth bracket ($181,440 in 2026). 100% of capital gains are included, dividends have no gross-up or credit, and 50% of most credits (80% of the donation credit) are allowed. Provinces add their own percentage, and Quebec has a separate AMT.

Canada Workers Benefit (CWB)

In plain language: A refundable credit for people with low earnings. It rises as you earn, then fades as family income climbs.

Technical: A refundable tax credit based on working income above $3,000 (27% phase-in) and adjusted family net income (15% phase-out), with separate single and family amounts. Alberta, Quebec and Nunavut have their own arrangements.

Canada Groceries and Essentials Benefit (CGEB)

In plain language: The enriched GST/HST credit: tax-free money paid four times a year to people with low or modest income.

Technical: The GST/HST credit, increased by 25% for five years from July 2026. Based on prior-year adjusted family net income and family size, paid quarterly, and reduced by 5% of income above the threshold.

Canada Child Benefit (CCB)

In plain language: A tax-free monthly payment to families with children under 18. It is larger for younger children and shrinks as family income grows.

Technical: A non-taxable monthly benefit based on the number and ages of children and prior-year adjusted family net income, with two reduction tiers by number of children.

Quebec abatement

In plain language: Quebec residents pay Quebec tax on a separate return, so the federal government cuts their federal tax by 16.5%.

Technical: A refundable-in-effect reduction of basic federal tax of 16.5% for individuals resident in Quebec on December 31, in respect of the provincial programs Quebec delivers itself.

Planning words

Break-even age

In plain language: The age at which starting later has paid you back for the months you gave up. If you live longer than that, waiting came out ahead.

Technical: The age at which cumulative payments from a later start equal those from an earlier start. For CPP alone, comparing a start at s with a start at 65: age = (65 x m65 - s x ms) / (m65 - ms), where m is the monthly amount.

Planning age

In plain language: The age you are planning to. It is not a prediction of how long you will live.

Technical: The end of the projection period used for lifetime totals and for how long savings must last.

Today's dollars (real dollars)

In plain language: Amounts adjusted for inflation so that $1,000 buys what $1,000 buys today. CPP and OAS rise with prices, so these calculators leave inflation out.

Technical: Constant-dollar figures. CPP is indexed each January and OAS each quarter to the CPI; investment returns on the retirement page are real (after inflation).

RRSP and RRIF versus TFSA

In plain language: RRSP and RRIF withdrawals count as taxable income. TFSA withdrawals do not, so they do not raise your clawback or cut your GIS.

Technical: RRSP and RRIF withdrawals are included in income for tax, the OAS recovery tax and GIS. TFSA withdrawals are not included in any of them.

Pension income splitting

In plain language: From 65 you can move up to half of certain pension income onto your spouse's tax return to even out incomes, which can lower the clawback.

Technical: An election to allocate up to 50% of eligible pension income to a spouse or common-law partner for tax purposes, reducing the transferor's net income for the OAS recovery tax.

Quebec Pension Plan (QPP)

In plain language: Quebec's own version of CPP. Its rules and amounts differ, so the CPP, OAS and GIS calculators are not for Quebec (the income tax calculator is).

Technical: A separate contributory plan administered by Retraite Quebec that is coordinated with CPP. Amounts, adjustments and survivor rules differ.

Your privacy. What you enter is used only to produce this page. It is not saved, stored in a database, emailed or shared, and it is gone when you close or leave the page.

Information only. Estimates in 2026 dollars, before tax. Not tax, legal, financial or pension advice. Service Canada sets your actual benefits.

Rates reviewed November 3, 2026. CPP: January 2026 maximums. OAS/GIS/Allowance: October to December 2026 rates. The CPP, OAS and GIS tools are not for Quebec residents (QPP rules differ); the income tax calculator covers Quebec.

New to the terms? See the definitions in plain and technical language, and a map of how it all connects.

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