PAYG Income & Home Loans

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PAYG simply means Pay As You Go — your employer pays you an income and withholds tax before paying you.

For home loans, PAYG income is generally one of the more straightforward types of income for lenders to assess.

But there are some differences across lenders, so it is worth having a chat with a broker to see what will work best for you.

Your regular base salary or wages are usually the starting point, but you might also receive:

• Overtime
• Bonuses
• Commissions
• Allowances
• Shift loading
• Penalty rates

To name a few.

Depending on the lender, these additional types of income can be treated differently.

A lender might consider all, some or none of a particular income type depending on things like how regularly you receive it, how long you've been receiving it and whether it's likely to continue.

Same payslip. Different lender. Potentially different result.

How you're employed can matter too.

Full-time and part-time permanent income is generally straightforward to assess, although requirements can vary if you've recently started a new job or are on probation.

Being casual doesn't automatically stop you from getting a home loan. Lenders may look at things like your employment history, hours worked and consistency of income.

Fixed-term and other contract income can also be acceptable, but lenders may differ in how they assess the contract, your industry, and your employment history.

Two people with the same taxable income each year won't necessarily have the same borrowing capacity.

How you earn the money can be just as important as how much you earn.

Understanding which parts of your income a lender may consider can make a big difference when comparing home loan options.

The Home Loan Nerds can help you understand how your income may be assessed and explain the lender differences in plain speak.

We know a lot about home loans so you don't have to.