Taxes in retirement: frequently asked questions

For 2026, federal tax is 14% on taxable income up to $58,523, 20.5% up to $117,045, 26% up to $181,440, 29% up to $258,482 and 33% above that. Provinces and territories add their own tax on top; see the provincial benefits hub for each one.

It is $16,452 for 2026, which means roughly that much income carries no federal tax before other credits. For incomes between $181,440 and $258,482 it is gradually reduced, down to $14,829 at the top of that range.

CPP, OAS, workplace pension payments, RRSP and RRIF withdrawals, annuity income from registered funds, and interest are fully taxable. Dividends and capital gains from non-registered accounts are taxed under their own rules. TFSA withdrawals are not taxable.

Your marginal rate is the tax on your next dollar of income; your average rate is total tax divided by total income. As an illustration, the calculator estimates $8,817 of combined federal and Ontario tax on $60,000 of 2026 income, an average rate of about 15% but a marginal rate of about 30% (before the age and pension income credits). Marginal rates matter most when deciding whether to take more income in a given year.

Spouses or common-law partners can allocate up to 50% of eligible pension income to each other on their tax returns. RRIF and registered annuity income qualifies from 65, while registered pension plan life annuity income qualifies at any age; OAS cannot be split. See pension income splitting and the pension income splitting tool.

No. CPP sharing is arranged through Service Canada and actually divides the CPP payments between spouses, while pension income splitting is an election on the tax return that does not move any money. They can be used separately or together. See CPP sharing between spouses.

The OAS recovery tax is 15% of net income above $95,323 in 2026, on top of regular income tax. That can make the effective rate on income in the recovery range noticeably higher than the bracket rate alone. The OAS clawback tool shows where it begins and ends for you.

Yes. The federal age amount is available from 65 and is reduced at higher incomes, and the pension income amount applies to eligible pension income. The site's tax estimates leave both out, so actual tax is often somewhat lower than shown. Confirm the current amounts with the CRA.

Withholding on each income source is calculated separately, so when CPP, OAS, a pension and RRIF withdrawals are combined, the total withheld may not match the tax owed. Some retirees ask for extra tax to be withheld from a pension or RRIF. If not enough is withheld, the CRA may ask for quarterly instalments; check your instalment reminders.

Yes, for every province and territory except Quebec. Quebec residents file a separate provincial return, so for Quebec the retirement tax calculator shows federal tax only. For Ontario, the estimate includes the surtax but not the Ontario Health Premium.

It can, because the same total income spread over more years may be taxed at lower marginal rates and stay below the OAS recovery threshold. The effect depends on your accounts, ages and province. The withdrawal order tool compares several approaches.

In general, the remaining value is included in the deceased's final return unless it passes to a surviving spouse or qualifying dependant, which can result in a large tax bill in one year. TFSA balances are not taxed at death. Confirm the details with the CRA and see estate planning basics.