All the Numbers

The Guaranteed Income Supplement

From the All the Numbers wiki · Retirement and benefits

The Guaranteed Income Supplement (GIS) is paid monthly, tax-free, to anyone receiving Old Age Security whose income is low enough. It is the reason a modest-income retiree is usually better off in a TFSA than an RRSP: every dollar drawn from an RRSP or RRIF is income for the GIS test and costs at least 50 cents of supplement before any income tax; a dollar from a TFSA costs nothing.

The formula

Single pensioner, on the previous calendar year's income with OAS itself excluded:

base   = max(0, 11,549.88 − 0.50 × income)
top-up = max(0,  2,116.92 − 0.25 × max(0, income − 2,000))
GIS    = base + top-up            (maximum 13,666.80 a year, October–December 2026)

The maximum for a single pensioner is $1,138.90 a month in October to December 2026, and the supplement is cut off at $23,112 of annual income.[1] The base part is $962.49 a month at most, reduced by $1 for every full $2 of monthly income.[2] The top-up is $176.41 a month at most.[3] It is reduced by 25 cents for each dollar of income over $2,000 (a threshold that is not indexed).[4] So the taper is 50% below $2,000 of income, 75% from there until the top-up is gone at $10,496, then 50% again until nothing is left at about $23,112.[5]

A couple where both receive OAS is tested on combined income. Each partner's base is at most $635.57 a month,[6] and each top-up at most $49.99 a month,[7] so each partner gets a lower maximum ($8,226.72 a year).[8] The top-up falls by one dollar per eight of combined income over $4,000 (also not indexed)[9] and the base by one per four; nil at about $30,096.

What counts as income

The GIS looks at the net income of the previous calendar year, not the current one, and pays for a July-to-June period.[10] Income excludes every Old Age Security Act benefit, so OAS and the GIS itself are left out.[11] Of employment and self-employment earnings, the first $5,000 is ignored[12] and so is half of the next $10,000, a further deduction of at most $5,000.[13] The deferral increase and the 10% increase at 75 are not part of the pension used in the GIS formulas, so taking them does not reduce the supplement.[14]

The GIS is itself added to net income and then deducted in working out taxable income. It therefore counts toward the age amount and OAS recovery tax tests but is not taxed.[15]

Details

  • Monthly base income is rounded down to a multiple of $2 before the $1-per-$2 reduction.[16]
  • The income over the top-up threshold is rounded down to a multiple of $4 a month.[17]
  • A pensioner on a partial OAS pension gets the shortfall from the full pension added to the supplement.[18]
  • When the spouse is not receiving OAS, a couple's combined income is first reduced by half of the full pension, rounded up to a multiple of $4, before the base is worked out.[19]

What the engine does

  • Pays it monthly to each person with an OAS stream in pay, on the prior year's income. Amounts and thresholds index at the plan's inflation rate from the October to December 2026 figures; see inflation and today's dollars.
  • Applies the rounding, the partial-pension addition and the July-to-June payment period described above.
  • Counts employment (after the exemption), CPP and other taxable benefits, RRSP withdrawals and RRIF minimums as income. OAS and TFSA withdrawals are excluded.
  • Uses the single table for a one-person plan. With a partner, it picks the table month by month: both on OAS uses the couple table, and while the partner is not yet on OAS it uses the table for a spouse who is not a pensioner.
  • Needs a year of income to assess. For the payments before the plan has a year of its own, it takes the two calendar years before the start as today's salary plus any CPP already in pay, with the employment exemption applied. RRSP withdrawals, interest and pensions in those years are not known and are left out.[20]

What it deliberately does not

  • The Allowance, paid to the spouse of a GIS recipient from age 60 until 65,[21] is not calculated. While a pensioner's spouse is 60 to 64 and not on OAS, the plan uses the table for a spouse who is not on OAS, so a couple that would qualify for the Allowance is shown less than it would receive.[22]
  • The married-pensioner enhancement, and the option to be assessed on estimated current-year income after retiring mid-year, are not applied.
  • Provincial top-ups such as Ontario's GAINS.
  • A reduced factor for people with fewer than 10 years in Canada; see Old Age Security.

See also: Old Age Security, the CPP retirement pension, taxes are per person.

See also

  • Inflation and today's dollars · The default inflation rate is 2.5% a year. A future dollar amount can be shown as is, or divided by (1 + inflation) for each year to show what it would buy today.
  • OAS at 75 · Old Age Security is 10% higher from the month after the 75th birthday. The plan takes every birthday as January 1, so in the projection the increase starts each February of the year a person turns 75.
  • Old Age Security · A monthly pension paid to most Canadians from 65, based on years lived in Canada after 18. It can be deferred for a permanent increase, rises 10% at 75 and is partly repaid through a recovery tax at high incomes.
  • Retirement age · The age at which a person's pay stops in the plan, 65 unless you give another. Their monthly contributions stop then, and an RRSP becomes a RRIF at 71.
  • RRIFs and the wind-up at 71 · An RRSP must become a RRIF by the end of the year you turn 71, after which a prescribed minimum comes out and is taxed every year. Give a birth year and the plan models it; leave it blank and a plan running past 71 looks better than it is.
  • RRSP room, deduction and withdrawals · Room accrues at 18% of earned income up to the annual cap, contributions earn a deduction refunded the following April, and withdrawals are taxed as income. The plan assumes you start with no carried-forward room unless you say otherwise.
  • Taxes are per person · Canada has no joint return, so each of you is taxed on your own income with your own brackets and credits. The routes that do move income between partners — pension splitting, spousal RRSPs, prescribed-rate loans — are not modelled, so a couple's real bill may be lower than this.
  • TFSA contribution room · Room starts accruing the year you turn 18, not the year you open an account, and it never expires. Withdrawals come back the following January. Limits past 2026 have not been announced, so the plan projects them by the rule the Act sets and says so.
  • The CPP retirement pension · A monthly pension from the Canada Pension Plan based on contributions, payable from 60 to 70. Starting earlier cuts it by 0.6% a month, starting later raises it by 0.7% a month. The plan estimates it from a Service Canada statement or from salary.
  • The OAS recovery tax · Years where net income clears the threshold repay 15% of the excess out of Old Age Security. The projection adds it to the year's return and pays it with the April balance; Service Canada takes it from the OAS payments from the next July instead, so only the timing differs.
  • Workplace pensions · A defined-benefit pension from an employer pays a set amount each month for life, sometimes with a bridge benefit that stops at 65. Enter the yearly pension you expect when it starts, with the years you will still work, under each person's workplace pension; the plan does not add one you have not entered.

References

  1. ↑ESDC — Maximum Benefit Amounts and Related Figures, OAS October to December 2026 (monthly $1,138.90 and $685.56 × 12) · GIS maximum a year, single, widowed or divorced pensioner (set each quarter; OAS excluded from income) · $13,666.80 · effective 2026-10-01
  2. ↑ESDC — Table of Benefit Amounts by marital status and income level, October to December 2026 (SG3-3-2026-4), Table 1; component derived from the rows past the top-up (each row + its income ÷ 24, rounded down, is $962.49) · GIS basic supplement a month (s.12(1)(a), (b)(i)), set each quarter, before the s.12.1 top-up; reduced $1 per full $2 of monthly base income · $962.49 · effective 2026-10-01
  3. ↑Old Age Security Act, s.12.1(1), (2.1), (3); amount from ESDC Table 1, October to December 2026 (1,138.90 − 962.49) · GIS top-up a month (s.12.1(1), (2)(a)) A, set each quarter (the July 2011 and July 2016 increases, CPI-indexed); reduced by C/4 where C is 1/12 of income over the single threshold or 1/24 of combined income over the couple threshold (spouse not a pensioner), rounded down to a multiple of $4 · $176.41 · effective 2026-10-01
  4. ↑Old Age Security Act, s.12.1(1) C(a) · GIS top-up income threshold, pensioner without a spouse (unindexed) · $2,000 · effective 2011-07-01
  5. ↑Old Age Security Act, ss.12, 12.1 · GIS reduction: base supplement minus "one dollar for each full two dollars" of a single pensioner's base income (s.12(1)(a)), one per four of a couple's combined income (s.12(1)(b)); top-up (s.12.1) minus one per four dollars of income over $2,000 single ($4,000 couple, one per eight of combined) · See the source · effective 2011-07-01
  6. ↑ESDC — Table of Benefit Amounts, October to December 2026, Table 2 (rows past the top-up: each row + its combined income ÷ 48, rounded down, is $635.57) · GIS basic supplement a month each where the spouse is also a pensioner (s.12(1)(b)(ii)), set each quarter; reduced $1 per full $2 of monthly base income (1/24 of combined income) · $635.57 · effective 2026-10-01
  7. ↑Old Age Security Act, s.12.1(2)(b), (3); amount from ESDC Table 2, October to December 2026 (685.56 − 635.57) · GIS top-up a month each where the spouse is also a pensioner (s.12.1(2)(b)) A, set each quarter (the July 2011 increase, CPI-indexed); reduced by C/4 where C is 1/24 of combined income over the couple threshold rounded down to a multiple of $4 · $49.99 · effective 2026-10-01
  8. ↑ESDC — Maximum Benefit Amounts and Related Figures, OAS October to December 2026 (monthly $1,138.90 and $685.56 × 12) · GIS maximum a year for each partner where both receive full OAS (set each quarter) · $8,226.72 · effective 2026-10-01
  9. ↑Old Age Security Act, s.12.1(1) C(b), s.12.1(2) C · GIS top-up income threshold, pensioner with a spouse, on combined income (unindexed) · $4,000 · effective 2011-07-01
  10. ↑Old Age Security Act, s.2 "base calendar year", "payment period"; s.11 · GIS is paid for the July–June payment period on the "base calendar year", the last calendar year ending before the payment period · See the source · effective 1998-01-01
  11. ↑Old Age Security Act, s.2 "income" · GIS income excludes every OAS Act benefit (s.2 "income" (c)(i)) and, of employment plus self-employment earnings, the first $5,000 and half of the next $10,000 (para (b.1)) · See the source · effective 2020-07-01
  12. ↑Old Age Security Act, s.2 "income" (b.1)(i) · GIS income: the first part of combined employment and self-employment earnings (after CPP/EI contributions) that is deducted · $5,000 · effective 2020-07-01
  13. ↑Old Age Security Act, s.2 "income" (b.1)(ii) ("the lesser of $5,000 and half of the amount by which the combined amount exceeds $5,000") · GIS income: the next band of combined earnings, of which half is deducted · $10,000 · effective 2020-07-01
  14. ↑Old Age Security Act, s.2.1(1)–(2) · The deferral increase and the age-75 increase are not part of the "full monthly pension" or "pensioner's monthly pension" used in the GIS formulas (s.12(5), s.12(6)(b)) · See the source · effective 2022-07-01
  15. ↑CRA — Line 14600 Net federal supplements paid; line 25000 Other payments deduction; ITA 110(1)(f) · GIS is included in net income (line 14600) and deducted in computing taxable income (line 25000): it affects the age amount and OAS recovery test but is not taxed · See the source · effective 2000-01-01
  16. ↑Old Age Security Act, s.12(5) ("D is... rounded... to the next lower multiple of two dollars") · GIS monthly base income is rounded down to the next lower multiple of this before the one-dollar-per-two reduction · $2 · effective 1998-01-01
  17. ↑Old Age Security Act, s.12.1(1) C; s.12(6)(b) B(ii) · GIS top-up income excess C is rounded down to the next lower multiple of this; the s.12(6)(b) pension offset is rounded up to a multiple of it · $4 · effective 2011-07-01
  18. ↑Old Age Security Act, s.12(5) · GIS for a partial-pension pensioner: [(A − B) × C] − D/2 where A = maximum supplement + full monthly pension, B = the pensioner's (partial) monthly pension, C = special qualifying factor (1 with ≥10 years residence), D = monthly base income — the supplement rises by (full − partial) pension · See the source · effective 1998-01-01
  19. ↑Old Age Security Act, s.12(6)(b) · Monthly base income when the spouse is not a pensioner (and receives no Allowance): A/24 − B/2, A = combined base-year income, B = full monthly pension × special qualifying factor rounded up to a multiple of $4 · See the source · effective 1998-01-01
  20. ↑Old Age Security Act s.2 "income" and s.11 (the payment period July–June rests on the base calendar year) · The GIS paid before the plan has a year of its own to assess (to June of its second year) rests on the two calendar years before the start; their income is taken as today's salary plus any CPP already in pay, with the GIS employment exemption applied. Other income those years (RRSP withdrawals, interest, pensions) is not known and is left out · See the source · effective 2026-09-25
  21. ↑Old Age Security Act s.19(1)(b): "has attained sixty years of age but has not attained sixty-five years of age" · OAS Allowance: paid to the spouse or common-law partner of a GIS recipient from the 60th birthday until 65 (not modelled; the age bounds when a couple meets it) · 60 years · effective 1975-10-01
  22. ↑Old Age Security Act ss.12(6), 19 (the Allowance, ages 60–64) · While a GIS pensioner's spouse is 60–64 and not on OAS, the spouse-not-on-OAS table (ESDC Table 3) is used; the Allowance and its table (Table 4) are not modelled, so a couple that would qualify for the Allowance is shown less than it would receive · See the source · effective 2026-09-25