Free, educational Canadian retirement tools · figures reviewed October 30, 2026Part of the MITEY network
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    Free tool 2026 rules

    Pension income splitting calculator

    Spouses and common-law partners can allocate up to half of eligible pension income from the higher earner to the lower earner on their tax returns. When their incomes are uneven, moving income into the lower bracket can reduce the household's combined tax and, sometimes, the OAS recovery tax.

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    Your household

    Higher-income spouse

    Registered pension plan income at any age; RRIF/annuity income from 65. CPP and OAS are not eligible.

    Lower-income spouse

    Lowest-tax split
    50%
    $30,000 allocated
    Estimated saving
    $3,229
    combined tax + recovery tax, per year
    Combined tax after split
    $12,755
    vs $15,984 with no split

    Combined tax at each split

    0% split$15,984
    10% split$15,005
    20% split$14,369
    30% split$13,733
    40% split$13,097
    50% split$12,755
    No splitBest (50%)Maximum (50%)
    Higher-income spouse's tax$15,933$7,332$7,332
    Lower-income spouse's tax$51$5,423$5,423
    OAS recovery tax$0$0$0
    Combined$15,984$12,755$12,755

    Up to 50% of eligible pension income can be allocated to a spouse or common-law partner each year by filing Form T1032 with both returns. Tax uses 2026 brackets and basic personal amounts only; the pension income amount ($2,000 federal credit base) and age amount are not modelled, so actual savings may differ. Splitting also moves income tax withholding — check with the CRA.

    Educational estimate, not advice. Results depend on your inputs and the assumptions listed. They are not a prediction of returns or a recommendation. Check benefit amounts in your My Service Canada Account and tax details with the CRA. Read the disclaimer.

    How to use this tool

    1. Enter the higher-income spouse's eligible pension income and other income.
    2. Enter the other spouse's income.
    3. See the best allocation and the tax saved.

    What counts as eligible pension income

    Life annuity payments from a registered pension plan qualify at any age. RRIF payments, annuity payments from an RRSP and some other amounts qualify from age 65. CPP and OAS are not eligible for this election, although CPP can be shared through a separate application to Service Canada — see CPP sharing between spouses.

    The election is made each year on Form T1032, filed with both spouses' returns, so the split can change year to year.

    Why the best split isn't always 50%

    The lowest-tax split is usually the point where the two incomes reach similar marginal rates. Beyond that, moving more just shifts tax from one return to the other. The tool tests every share from 0% to 50% in 1% steps.

    Frequently asked questions

    Do both spouses need to agree?
    Yes. Both must sign and file the joint election, with the same amounts on each return.
    Does splitting affect the pension income credit?
    It can let the receiving spouse claim the pension income amount too, which this tool doesn't model, so real savings may be a little higher.
    What about Quebec?
    Quebec has its own pension splitting rules for provincial tax. Our estimates show federal tax only for Quebec residents.

    Official sources

    Figures checked October 30, 2026. Rules and amounts change; confirm current details on the official pages above.