How is retirement income taxed in Canada?

It depends on the source. TFSA withdrawals are tax-free. RRSP/RRIF withdrawals, CPP, OAS and interest are fully taxable. Eligible dividends are grossed up 38% and then get a dividend tax credit. Only 50% of capital gains is taxable. Retirees pay no CPP or EI on this income and may qualify for the age amount and pension-income credit — but higher earners face the OAS clawback (15% of income above the threshold).

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Retirement income

What's your real after-tax retirement income?

The same dollar is taxed very differently depending on which account it comes from. Enter your retirement income by source to see what you actually keep.

A dollar from your TFSA is tax-free; a dollar from your RRIF is fully taxable; eligible dividends and capital gains each have their own treatment. This calculator models federal and provincial tax, the age and pension credits, the dividend tax credit, the 50% capital-gains inclusion, and the OAS clawback — so you can see your true net income, or work backwards from the net amount you want to spend.

Province

Your age

RRSP / RRIF withdrawals

CPP / QPP

OAS

Eligible dividends

Capital gains realized

Interest / other income

Other pension income

TFSA withdrawals

Tax-free

Your after-tax income

$47,881

Effective tax rate 12.5% across all sources.

Taxable income

$54,717

Federal tax

$4,095

Provincial tax

$2,741

OAS clawback

Marginal rate

23.2%

Income by source
Source	Cash received	Added to taxable income
RRSP / RRIF withdrawals	$35,000	$35,000
CPP / QPP	$10,800	$10,800
OAS	$8,917	$8,917

Estimate for education, not tax advice. Modelled on 2026 federal and provincial rates; provincial age/pension credits and surtaxes are simplified. Your situation may differ.

What's next

Will your OAS be clawed back?The recovery tax — and how to keep more.Do you qualify for the GIS?The tax-free top-up and its income ceiling.Which drawdown strategy wins?Meltdown vs minimum RRIF on lifetime tax.