Old Age Security (OAS) can be subject to Canadian tax when you live outside Canada. For a non-resident, Canada generally withholds tax directly from OAS payments. The standard 2026 non-resident withholding rate is 25%, although a tax treaty between Canada and your country of residence may reduce the rate or eliminate the tax.
Your Country of Residence Determines the Withholding Rate
The standard Canadian non-resident tax applies to several types of Canadian income, including OAS. However, Canada has tax treaties with many countries that provide different treatment for pension and social security payments.
As a result, two people receiving the same OAS pension can have different amounts of Canadian tax withheld simply because they live in different countries. The government publishes OAS non-resident tax rates by country, so checking the rate for your country is more useful than assuming the standard rate applies.
Tax residency matters here, not simply where you happen to be travelling. Someone spending a few months outside Canada does not automatically become a non-resident for Canadian income tax purposes. This article deals specifically with people who are non-residents of Canada for tax purposes.
OAS Recovery Tax Can Also Apply to Non-Residents
Non-resident withholding tax is separate from the OAS recovery tax. For the 2026 income year, the minimum recovery threshold is $95,323 in net world income. A non-resident above that threshold can be subject to recovery tax when living in a country where the applicable non-resident tax on Canadian pensions is 25% or more.
For many non-resident OAS recipients, the Old Age Security Return of Income is used to determine whether recovery tax applies. Certain residents of countries covered by applicable Canadian tax treaties do not have to file this return. The exemption depends on the country and current treaty rules rather than simply on living abroad.
You May Be Able to Reduce the Canadian Tax
A non-resident who receives OAS is among those who can choose to file a Canadian return under Section 217. This optional election calculates Canadian tax using an alternative method and can result in a refund of some or all of the non-resident tax already withheld when the calculation is more favourable.
Another possibility is Form NR5, which allows an eligible non-resident to request a reduction in the amount of Canadian non-resident tax withheld at source. These options matter because the amount deducted automatically from an OAS payment is not necessarily the lowest Canadian tax amount available in every situation.
Before choosing either route, check the rules that apply to your country and income rather than treating the withholding rate as your final result. For the rules that apply while you are still a Canadian resident, see our separate explanation of how OAS is taxed in Canada.
Other Tax Questions About OAS Outside Canada
Will you receive a Canadian tax slip for OAS while living abroad?
Yes. Non-residents receiving OAS are issued an NR4(OAS) information slip showing the OAS paid during the previous year and amounts deducted for Canadian taxes. The slip can also be accessed through My Service Canada Account.
Can your new country of residence also tax your OAS?
Possibly. Whether the country where you live taxes Canadian OAS depends on that country’s domestic tax rules and any applicable tax treaty with Canada. Canadian withholding therefore does not, by itself, determine your tax obligation in the country where you live.
Does Canadian tax determine whether you are allowed to keep receiving OAS abroad?
No. The rules governing whether OAS can continue while you are outside Canada are separate from the tax rules. Our guide to receiving OAS outside Canada explains the residence requirements and how long payments can continue.
