You earned $140,000 last year.
You know, because you worked for it.
Night shifts. Weekends. Public holidays. Overtime when someone didn’t show. Extra shifts when you wanted the money, or sometimes when you just couldn’t say no.
You look at your income statement and see $140,000.
Then you apply for a home loan.
The lender says:
“We can only use $96,000 of that income.”
Wait. What?
The money was real. It hit your account. It was on your payslips. You paid tax on it.
So why isn’t the lender counting it?
For nurses, prison officers and other shift workers, this can be one of the more frustrating parts of applying for a home loan.
The issue isn’t necessarily how much you earn.
It’s how the lender assesses the different parts of your income.
The number on your payslip isn’t the end of the calculation
When a lender looks at your income, it isn’t necessarily looking at one big number.
It’s pulling the number apart.
Your base salary is one thing. Overtime is another. Penalty rates are another. Allowances can be treated differently again. Casual or secondary income has its own considerations.
Then there’s your employment history, which gives the lender context around those numbers.
Think of it as a funnel.
You earn the money. You provide evidence. The lender assesses the different income components according to its policy. Then it applies its servicing calculations.
Only after that do you get the income figure that actually feeds into your borrowing capacity.
So the $140,000 on your income statement isn’t necessarily the $140,000 the lender uses.
And that’s why two people earning similar amounts can get very different borrowing outcomes.
Start with your base salary
Your base salary is usually the straightforward part.
It’s predictable, documented and generally tied to your employment contract.
Then things get more interesting.
Overtime
Say you earned another $25,000 in overtime last year.
You worked those shifts. The payslips show it.
But the lender may not simply add the full $25,000 to your base salary.
It’s asking a different question:
How reliable is this income, and how likely is it to continue?
That’s why overtime can be treated differently from your base salary. A lender may apply an adjustment to variable income, while another lender may have a policy that allows more of eligible overtime to be recognised.
You may even see lenders advertising 100% overtime recognition for eligible workers.
That doesn’t mean they’ll lend you 100% of your overtime.
It means the lender may include 100% of eligible overtime in the income figure it uses for its assessment, subject to its policy and the rest of the servicing calculation.
Penalty rates
For a nurse working nights, weekends and public holidays, penalty rates can make a serious difference to annual income.
The same can apply to prison officers and other shift workers.
But the lender is interested in the pattern.
Have you been working those shifts consistently? Are they part of your normal roster? Does your income history support what you’re earning?
APRA’s current guidance says lenders should consider the nature of income and make appropriate adjustments for variable or less-stable income. It also recognises that usual shift penalties can form part of verified salary or wage income.
The money isn’t the issue.
Reliability is.
Allowances
Allowances can be even less straightforward.
Some are recurring. Some depend on what you’re doing. Some may reimburse particular costs.
So don’t assume every allowance will be treated the same way.
Casual or secondary income
Maybe you’re permanently employed at a hospital but pick up agency shifts on the side.
That extra income can make a meaningful difference to what you earn.
But the lender wants context.
How long have you been earning it?
How consistent has it been?
Is there enough history to support using it in the assessment?
Employment history
You might have a fantastic payslip today, but if you’ve only been in the role for three months, the lender may want to understand why.
Maybe you’ve just moved from casual to permanent.
Maybe you’ve changed hospitals.
Maybe your overtime has only recently increased.
None of that automatically means no.
It just gives the lender more of the story behind the number.
Same nurse. Same payslips. Different lender.
Here’s where lender policy matters.
Imagine a nurse with:
- $95,000 base salary
- $25,000 overtime
- $8,000 penalty rates
- $4,000 allowances
That’s $132,000 in gross income.
The nurse looks at that and thinks:
“That’s what I earn.”
Fair enough.
But two lenders could look at those same payslips and assess the income differently.
One might take a more conservative approach to the variable components.
Another might recognise more eligible income under its policy, assuming the borrower meets the relevant criteria.
Same nurse.
Same payslips.
Different lender.
Potentially different assessed income.
And potentially different borrowing capacity.
That’s why lender policy matters.
Not because one lender ignores the rules.
Because lenders can have different policies for assessing different types of income within the broader prudential framework.
Don’t let a complicated income look simpler than it is
This is where the paperwork matters.
If your income is made up of a base salary, overtime, penalty rates, allowances and secondary work, you want the lender to see the whole picture.
Depending on the lender and the type of income, that could mean recent payslips, year-to-date figures, income statements, employment history or evidence supporting variable income.
APRA’s guidance lists payslips, employment information, tax documents, bank statements and other supporting evidence among the ways income can be verified.
The goal isn’t to make your income look bigger than it is.
It’s to make sure the lender can see what you actually earn and understand where it comes from.
Ask a better question
Most people start with:
“How much can I borrow?”
That’s useful.
But if you’re a shift worker with multiple income components, there’s another question worth asking first:
“Which parts of my income are you actually using?”
Then get specific.
- How are you treating my overtime?
- What about penalty rates?
- Which allowances count?
- How are you treating my secondary income?
- What evidence do you need?
- Would another lender assess the same income differently?
You don’t need a lender that says yes to everything.
You need a lender whose policy fits the way you actually earn your money.
