When you apply for a home loan, your payslips do a lot of the talking. For a shift worker on a mine site in the Isaac, a single payslip can carry a dozen lines: base hours, overtime at two rates, night shift penalties, a site allowance, travel, salary sacrifice, union fees and super. Here's how lenders tend to read it.
What's on a payslip
The Fair Work Ombudsman sets out what a payslip must include. That covers the employer and employee names, the employer's ABN if it has one, the pay period and payment date, gross and net pay, the ordinary hourly rate and hours for hourly employees, any loadings, allowances, bonuses, penalty rates and other separately identifiable entitlements, each deduction with its details, and super contributions. Employers must give you a payslip within one working day of payday.
Lenders use those details to check your employment is real and current, and to split your income into parts they can rely on and parts they treat with more caution.
Base pay
Base pay is the anchor. Lenders will usually count it in full as long as you're permanent and past probation. If you're on an annual salary, they may also ask for a contract or employer letter that states it. If you're paid hourly, they'll look at your ordinary hours and rate.
Overtime and penalty rates
This is where policies split. Some lenders count all overtime and shift penalties if you can show they're regular. Others count a portion. A few may only consider them if they're a set part of your roster. What helps your case:
- A roster that builds overtime in, rather than ad hoc extra shifts
- A history of six to 12 months or more in the same role or industry
- Your previous financial year's income, shown on your income statement, landing close to what your year-to-date figure suggests
Allowances
Allowances cover a wide range. Site, remote area, shift and tool allowances that you receive every pay are generally easier for lenders to accept. Allowances that reimburse a cost you actually spend, such as travel or meals, may be treated differently, because the money doesn't really add to what you have left over. It depends on the lender and your circumstances.
Salary sacrifice
The ATO describes salary sacrifice, also called salary packaging, as an arrangement where you agree to take less pre-tax pay in exchange for benefits of similar value that your employer provides. Common examples are extra super contributions and novated car leases.
On a payslip, salary sacrifice reduces the gross figure the lender sees. Some lenders may add voluntary super contributions back into your income because they're a choice you could stop. A novated lease is different, because the car costs money each month either way, so lenders usually treat it as a commitment. Reportable fringe benefits can also appear on your income statement. How each one is counted varies from lender to lender. On the tax side, your accountant can advise.
Year-to-date figures
For roster workers, the year-to-date line is often the number that matters most. One payslip might fall on a heavy fortnight or a light one. The year-to-date total smooths that out.
Lenders typically take your year-to-date gross, divide it by the time elapsed in the financial year, and annualise it. They then compare that to your base pay and last year's income to see whether it holds up.
Illustrative example with round numbers: your financial year started on 1 July. On your payslip for the period ending 31 December, the year-to-date gross is $90,000. That's six months, so the annualised figure is $180,000. If your base pay is $120,000 and last financial year you earned $175,000, a lender can see the extra $60,000 has been consistent. If last year was $130,000, they may want an explanation or use the lower figure.
A few things can distort year-to-date figures:
- A one-off bonus or back pay in the period
- Paid leave cashed out
- Starting the job partway through the year
- A pay cycle that doesn't line up neatly with 1 July
If any of those apply, tell your broker early so it can be explained in the application.
Deductions lenders notice
Deductions tell a story too. Child support, a salary-sacrificed car, a HECS-HELP repayment or a payroll loan from your employer all reduce what you have each month. Lenders will factor those in, so it's better to raise them upfront.
What to send
- Your two most recent consecutive payslips, showing year-to-date figures
- Your income statement for the last financial year, from myGov
- Your employment contract or an employer letter if you're new, on salary, or recently changed roles
- Any document that explains unusual items, such as a bonus letter
See our mining and FIFO home loans page for more on roster income, and our first home buyers page if this is your first purchase.
For most home loans there's no broker fee; any fee is disclosed upfront in our Credit Guide.
Talk it through
Send us your latest payslip and we'll walk you through how different lenders may read it. Call or text 0458 773 002, or start with the free assessment at our contact page.
Common questions
How many payslips do lenders need?
Many lenders ask for your two most recent consecutive payslips, plus your last income statement or tax return. Some ask for more if you're new to the role or your income varies.
Do lenders count overtime for mine workers?
Some lenders count all regular overtime with a steady history, some count part, and some count very little. It depends on the lender and your circumstances.
Does salary sacrifice reduce how much I can borrow?
It can, because it lowers the gross pay on your payslip. Some lenders may add voluntary super contributions back, while commitments such as a novated lease are usually treated as an expense.
Why does my year-to-date figure matter so much?
It shows what you've actually earned over several months, which smooths out heavy and light pay periods on a roster.
Sources
- Fair Work Ombudsman: Pay slips
- ATO: Salary sacrificing for employees
- ATO: Reportable fringe benefits for employees
This guide is general information only and doesn't take into account your objectives, financial situation or needs. Talk to us about your circumstances before acting on it. Related: Mining & FIFO loans.