Nearly 1.2 million Canadians aged 65 and older were either working or looking for work in 2025, the highest number on record since 1976. That is roughly one in seven seniors, and the trend is accelerating. For a retiree living on a fixed pension, going back to work part-time can mean the difference between covering monthly expenses and falling behind.
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This article is general information only and does not constitute professional advice. For your specific situation, consult a qualified professional.
These numbers are not a blip. The share of older Canadians working after retirement has climbed steadily from 7% in 2019 to 10% in 2023, and the participation rate for those 65 and older has risen for five straight years. Financial pressure, longer life expectancy, and a shift away from guaranteed pension plans are pushing more people back into the workforce. Here’s what you actually need to know.
Before digging into the numbers, it helps to understand one key term. A labour force participation rate measures the share of a given population that is either employed or actively looking for work. It excludes people who have stopped looking entirely.
How much money part-time work actually brings in
For a retiree working 16.2 hours per week — the average for those 65 and older — the income depends heavily on the hourly wage. At minimum wage in Ontario ($17.20 in 2025), that works out to roughly $278 per week, or about $14,500 per year before tax. At $25 per hour, it jumps to about $21,000 per year. That is not pocket change. It can cover rent, groceries, or property tax on a home.
What I tend to notice is that people underestimate how much even a small weekly income changes their tax situation. The basic personal amount in Canada for 2025 is roughly $16,000 federally, meaning you can earn that much before paying federal income tax. Earn above that, and your Old Age Security (OAS) may also be clawed back if your net income exceeds the threshold — about $91,000 in 2025. That is a high bar for most part-time workers, but worth knowing if you have other income sources like a pension or investments.
Here is how the numbers break down by income level and hours worked:
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| Hours per week | At $17.20/hr (Ontario min.) | At $25/hr | At $35/hr |
|---|---|---|---|
| 10 | $8,944 / year | $13,000 / year | $18,200 / year |
| 16.2 (average) | $14,489 / year | $21,060 / year | $29,484 / year |
| 20 | $17,888 / year | $26,000 / year | $36,400 / year |
| 30 | $26,832 / year | $39,000 / year | $54,600 / year |
Notice that at 16.2 hours per week at minimum wage, you stay under the basic personal amount. At $25 per hour, you cross it and owe some federal tax. At $35 per hour, you are well into the first tax bracket and may also start seeing GIS benefits reduced if you qualify for the Guaranteed Income Supplement. The interaction between part-time income and benefit clawbacks is where most people get caught out.
Where retirees trip up financially
Underestimating the GIS clawback
The Guaranteed Income Supplement is income-tested. Every dollar of employment income you earn reduces your GIS by 50 cents, up to a certain exemption. For 2025, the first $5,000 of annual employment income is exempt, and 50% of the next $10,000 is exempt. That means you can earn up to $10,000 before GIS starts dropping. Earn $15,000, and your GIS is reduced by $1,250. Many retirees do not realise this until they file their taxes and see the repayment.
Ignoring the OAS repayment threshold
OAS clawback kicks in when net income exceeds roughly $91,000. If you have a company pension, CPP, part-time wages, and investment income, you can hit that number faster than you think. The repayment is 15% of the excess. If your income is $100,000, you repay $1,350. That is a real cash hit that does not show up on your pay stub.
Not adjusting tax withholdings
When you start a part-time job in retirement, your employer withholds tax based on that job alone. But your total income from all sources — pension, CPP, OAS, investments — may push you into a higher bracket. You can file a TD1 form with your employer to request additional tax withheld, or you may end up with a surprise tax bill at filing time.
Forgetting about CPP post-retirement benefits
If you are under 70 and working while receiving CPP, you must contribute to the CPP Post-Retirement Benefit. This increases your CPP payout for life. But it also means your employer deducts CPP from your pay, reducing your take-home. The contribution rate in 2025 is 5.95% on earnings above $3,500, up to the maximum pensionable earnings of $71,300. On $20,000 of part-time income, that is about $982 in CPP contributions you and your employer each pay.
What I would do is run a quick estimate using the Canada Revenue Agency’s benefits calculator before accepting a job. It shows how part-time income affects your OAS, GIS, and GST credit in real time.
How to structure part-time work in retirement
Choose the right employment type
Self-employment offers the most control over hours and income timing. Among post-retirement workers, 33% are self-employed. You can deduct business expenses, choose when to invoice, and keep income below benefit clawback thresholds. The trade-off is no employer CPP contributions, no paid sick leave, and you must handle your own tax instalments. A self-employment tax guide can help you track deductible expenses properly.
Understand the part-time preference data
Of seniors working part-time in 2025, 79.9% said personal preference was the reason. Only 4.9% cited their own illness. That suggests most retirees who work part-time do it because they want to, not because they have to. But the 10% who returned to work after full retirement — up from 7% in 2019 — are more likely driven by financial need. If you are in that group, focus on jobs in health care, retail, or professional services, which employ the most older workers.
Time your CPP and OAS start dates
Delaying CPP past age 65 increases your monthly payment by 0.7% for each month you wait, up to age 70. That is an 8.4% increase per year. If you work part-time from 65 to 70, you can delay CPP and let it grow while earning wage income. OAS also increases by 0.6% per month if deferred past 65. The trade-off is you forgo years of payments. For someone earning $15,000 per year part-time, deferring CPP to 70 may make sense because the wage income covers current expenses.
Watch for the 2025 rule changes
As of 2025, the federal government has not announced major changes to OAS or GIS eligibility for working seniors. But the rising cost of housing in Canadian cities is pushing more retirees to work longer. Keep an eye on the annual budget for any adjustments to the GIS earnings exemption or the OAS repayment threshold, as these directly affect how much part-time work pays after taxes and clawbacks.
Frequently asked questions
Can I work while receiving CPP? ▾
How much can I earn before losing GIS? ▾
Does part-time work affect my OAS? ▾
Do I have to pay CPP if I am self-employed? ▾
What is the average retirement age in Canada? ▾
How many seniors work multiple jobs? ▾
Part-time work is reshaping what retirement looks like
The shift from defined-benefit pensions to defined-contribution plans, combined with longer life expectancy and higher debt levels, means the old model of stopping work completely at 65 no longer fits most Canadians. The data shows that 1 in 10 retirees are already back at work, and the number is climbing. The key is not whether to work, but how to structure the work so it does not trigger benefit clawbacks or surprise tax bills. A few hours a week at the right wage, in the right job type, can stretch your savings years further than any investment strategy.
Remember: this article is general information only. For advice on your specific situation, speak to a qualified professional.
If this was useful, you might also want to read How to Create Passive Income for Financial Growth in Canada.
Sources and Further Reading
Inflation-Proof Your Portfolio: Investing Strategies for a Canadian Reality — Understand how inflation affects your retirement income and what investments hold up best.
Savvy Savings Switches: Small Changes, Big Financial Impact for Canadians — Practical ways to cut costs and free up cash flow in retirement.
Statistics Canada (2025). Retirement and post-retirement employment among older Canadians. 🔗
Statistics Canada (2025). A record number of Canadian seniors worked in 2025 — here are some reasons why. 🔗
Policy Options (2024). Older Canadians are working longer — and that’s a good thing. 🔗
