Can You Work While Receiving CPP and OAS? A Complete Guide for Canadian Retirees

One of the most common questions Canadians ask when planning retirement is: Can I continue working while receiving CPP and OAS?

The simple answer is yes. You can continue working part-time, full-time, seasonally, or through self-employment after starting your Canada Pension Plan (CPP) retirement pension and Old Age Security (OAS).

However, working while collecting government benefits can have important consequences for your taxes and retirement income. Depending on your age, continuing to work may require CPP contributions, which can generate additional CPP Post-Retirement Benefits. Higher income can also trigger the OAS recovery tax, commonly called the OAS clawback.

Understanding these rules can help you decide whether to start CPP or OAS while working, delay your benefits, or coordinate government benefits with your other retirement income.

Can You Work While Receiving CPP?

Yes. There is no earnings limit that causes your CPP retirement pension to stop simply because you continue working.

You can start CPP as early as age 60 and continue working afterward. Your CPP retirement pension is not reduced because you earn employment or self-employment income.

In fact, if you continue working while receiving CPP and continue contributing, you may increase your future CPP income through the CPP Post-Retirement Benefit (PRB).

CPP Contributions While Working

The rules depend on your age. If you are working while receiving CPP, the following generally applies:

• Under age 65: CPP contributions are generally mandatory if you are working and your earnings are subject to CPP.
• Age 65 to 69: you can choose to stop contributing to CPP. Employees can make the election using Form CPT30.
• Age 70 and older: CPP contributions stop, even if you continue working.

The rules are different in Quebec because the Quebec Pension Plan (QPP) applies to employment covered by Quebec's pension system.

What Is the CPP Post-Retirement Benefit?

CPP contributions made while you are already receiving your CPP retirement pension are not simply lost. If you continue contributing, each qualifying year can generate a Post-Retirement Benefit.

The additional benefit begins the following year and continues for life. The amount depends on your pensionable earnings and contributions.

For example, someone who continues working for several years after starting CPP can accumulate multiple Post-Retirement Benefits. This can gradually increase their guaranteed retirement income.

Can You Work While Receiving OAS?

Yes. OAS does not require you to stop working.

You can receive OAS while working full-time, part-time, seasonally, or while operating a business.

The important difference between CPP and OAS is that higher income can cause some or all of your OAS pension to be repaid through the OAS recovery tax.

What Is the OAS Clawback?

The OAS clawback is formally called the Old Age Security recovery tax. It is not a separate tax on employment income. Instead, it requires you to repay part of your OAS when your income exceeds the applicable threshold.

For the 2026 tax year, the OAS recovery-tax threshold for people aged 65 to 74 is $95,323. The recovery tax is generally 15% of the amount of net world income above the applicable threshold.

The threshold is indexed and changes over time, so retirees should always check the current CRA or Government of Canada figures when making a planning decision.

Example: How the OAS Recovery Tax Works

Suppose a retiree's applicable net world income is $105,000 and the applicable threshold is $95,323.

• Net world income: $105,000
• OAS threshold: $95,323
• Income above threshold: $9,677
• Recovery rate: 15%

The approximate recovery tax would therefore be:

$9,677 × 15% = $1,451.55

The actual calculation depends on the applicable tax year, your age, and your individual circumstances. The recovery tax cannot exceed the OAS pension and applicable supplements received.

What Income Counts Toward the OAS Clawback?

Employment income is only one part of the calculation. The OAS recovery tax is based on the income used for the applicable OAS recovery-tax calculation, so retirees need to consider their overall income rather than looking only at their paycheque.

Depending on your circumstances, this can include income such as:

• Employment income
• CPP benefits
• RRSP and RRIF withdrawals
• Employer pension income
• Interest income
• Dividend income
• Rental income
• Business income
• Taxable capital gains

This is why someone can trigger an OAS recovery tax even after they have stopped working. Large RRIF withdrawals, investment income, pension income, and other taxable sources can push total income above the applicable threshold.

Can You Lose All of Your OAS?

Yes. At sufficiently high income levels, the OAS recovery tax can eliminate the entire OAS pension for the applicable recovery period.

The income level at which this happens changes over time because the OAS thresholds and maximum benefit amounts are adjusted.

For 2026, the recovery-tax range for people aged 65 to 74 extends from $95,323 to $155,109. For people aged 75 and older, the upper threshold is higher because of the higher OAS benefit available at that age.

This makes income planning particularly important for retirees who are still working or who expect substantial RRIF withdrawals or investment income.

Working While Receiving CPP and OAS: Example Scenarios

Scenario 1: Part-Time Employment

Sarah is 67 and receives:

• CPP: $12,000 per year
• OAS: $8,800 per year
• Part-time employment: $20,000 per year

Her employment income does not automatically stop either pension. However, her total income must be considered when determining whether an OAS recovery tax applies.

Because she is over 65, Sarah can also decide whether to continue contributing to CPP while working. If she continues contributing, those contributions can generate additional Post-Retirement Benefits.

Scenario 2: Consulting Income

John is 68 and earns:

• CPP: $15,000 per year
• OAS: $8,800 per year
• Consulting income: $80,000 per year

John's total income is substantially higher than Sarah's. Depending on the applicable tax year and his other income, he may have an OAS recovery tax.

He does not lose his OAS simply because he is working. Instead, the recovery-tax rules determine how much, if any, of his OAS must ultimately be repaid.

Tax Considerations When Working in Retirement

The OAS recovery tax is only one part of the equation. Employment income can also increase your ordinary income-tax liability and affect your overall retirement-income strategy.

Depending on your circumstances, higher income can affect:

• Federal and provincial income taxes
• OAS recovery tax
• Income-tested government benefits
• Tax credits and deductions
• RRIF withdrawal strategies
• The amount of income you need to withdraw from investments

This is why it is useful to evaluate your entire retirement income plan rather than looking at CPP, OAS, employment income, or investment withdrawals separately.

Strategies to Manage OAS Recovery Tax

1. Coordinate RRIF Withdrawals

Large RRIF withdrawals can significantly increase taxable income in a single year. Planning withdrawals over multiple years may help smooth taxable income, although required minimum withdrawals and personal circumstances still need to be considered.

2. Consider Pension Income Splitting

Eligible pension income can sometimes be split between spouses or common-law partners. This can change the amount of income reported by each spouse and may affect the overall tax picture and OAS recovery-tax exposure.

3. Manage Investment Income

Interest, dividends, rental income, and taxable capital gains can all affect your overall income. Coordinating when investment income is realized can therefore be an important part of retirement-income planning.

4. Use Your TFSA Strategically

TFSA withdrawals are generally not included in the income used to calculate the OAS recovery tax. This makes TFSAs particularly useful for creating tax-free retirement cash flow.

A retiree could potentially use TFSA withdrawals for certain expenses instead of generating additional taxable income from an RRSP or RRIF.

5. Consider Delaying OAS

OAS can be delayed from age 65 to as late as age 70. For each month you delay, your eventual OAS pension increases by 0.6%, up to a maximum increase of 36% at age 70.

For someone with substantial employment or investment income, delaying OAS can also change the timing of when OAS income enters the overall retirement-income plan.

Should You Delay CPP If You Continue Working?

Continuing to work does not automatically mean you should delay CPP, but it is one scenario worth modelling.

CPP can begin as early as age 60 and can be delayed to age 70. Starting before 65 permanently reduces the monthly pension, while delaying after 65 increases it by 0.7% per month, up to a maximum increase of 42% at age 70.

Someone with substantial employment income may therefore compare several strategies:

• Start CPP while continuing to work.
• Start CPP but continue making CPP contributions.
• Stop CPP contributions after age 65 if eligible.
• Delay CPP to receive a larger lifetime monthly pension.

There is no single strategy that works for everyone. Health, longevity, employment income, taxes, investment assets, spouse or survivor considerations, and spending needs can all affect the decision.

How Retirementize Can Help

The interaction between employment income, CPP, OAS, taxes, RRIF withdrawals, investment income, and inflation can become surprisingly complex.

Even relatively small changes in retirement income can affect your taxes and potentially your OAS recovery tax.

The Retirementize Retirement Income Calculator lets you model these interactions and compare different retirement strategies.

You can evaluate scenarios involving:

• Working part-time during retirement
• Working full-time beyond age 65
• Different CPP start dates
• Different OAS start dates
• RRIF withdrawal strategies
• OAS recovery-tax impacts
• Tax-efficient retirement income strategies
• Different investment and spending assumptions

Frequently Asked Questions

Can I work full-time while receiving CPP?

Yes. There is no earnings limit that prevents you from working while receiving CPP. If you are under 65 and working while receiving CPP, contributions are generally mandatory. From age 65 to 70, you can elect to stop contributing.

Can I work while receiving OAS?

Yes. You can work while receiving OAS. However, higher income can cause some or all of your OAS to be repaid through the OAS recovery tax.

Will I lose CPP if I return to work?

No. Your CPP retirement pension is not reduced simply because you return to work. If you continue making CPP contributions, you may also build Post-Retirement Benefits.

Can I stop CPP contributions after age 65?

Yes. If you are 65 to 69 and working while receiving CPP, you can generally elect to stop contributing. Employees outside Quebec can use Form CPT30. The election remains in effect until age 70 unless you revoke it.

Do TFSA withdrawals affect OAS recovery tax?

Generally, no. TFSA withdrawals are not included in the income used to calculate the OAS recovery tax. This is one reason TFSAs can be valuable as a source of tax-free retirement cash flow.

Can I delay OAS if I am still working?

Yes. OAS can be delayed until age 70. Each month of delay increases the eventual OAS pension by 0.6%, up to a maximum increase of 36%.

Conclusion

The good news is that Canadians can absolutely continue working while receiving CPP and OAS. Working does not automatically stop either benefit.

CPP and OAS work differently, however. CPP can continue while you work, and continued CPP contributions can create additional Post-Retirement Benefits. OAS can also continue while you work, but higher income may result in an OAS recovery tax.

The most important point is to look at the entire retirement-income picture. Employment income, CPP, OAS, RRIF withdrawals, pensions, investment income, taxes, and TFSA withdrawals can all interact.

Before deciding when to stop working or when to start CPP and OAS, use the Retirementize Retirement Income Calculator to compare different income strategies and see how they affect your retirement plan.

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