Broker guide
How Lenders Assess Bonus Income for Home Loans
Can a recurring bonus support a mortgage when a one-off payment cannot? Bonus income home loan assessment turns on history, averaging and employer records.
- Published
- Updated
A lender counts bonus income for a home loan when the bonus is an ongoing part of the client’s pay and their payment history supports the amount. The figure you enter as assessable income is often lower than the latest bonus. Depending on the lender, the bonus is averaged, cut to its lower year or only partly counted.
The same payslips can produce a different usable bonus at each lender. In the worked example below, a $20,000 latest bonus becomes a usable bonus of between $12,000 and $16,000, depending on the lender’s averaging rule.
Understand the Bonus
Start by working out whether the bonus is set by the employment terms or paid at the employer’s discretion. Lender tests ask whether the payment will keep coming, and the terms of the bonus answer that better than the latest payslip does.
The terms usually fall into one of these patterns. The lender rules in the right-hand column come from Macquarie’s 10 September 2026 residential credit guidelines and MyState’s mortgage lending procedure, effective 1 July 2026.
| Bonus type | What the terms say | How those lender tests read it |
|---|---|---|
| Guaranteed or formula bonus | The contract sets the amount, or a formula such as a percentage of sales | Fits Macquarie’s test that the bonus is a condition of employment |
| Discretionary performance bonus | The employee is eligible, but the employer decides the amount each year | Counted on history, because the amount can change. MyState’s 80% allowance assumes the terms and potential payment stay the same |
| Sign-on, retention or one-off bonus | Paid once, to start or to stay | Not ongoing, so leave it out of assessable income |
The Australian Taxation Office (ATO) groups these payments together. Its Single Touch Payroll (STP) reporting guidelines, last updated 12 November 2025, have employers report bonuses and commissions separately from gross pay. That category includes sign-on, retention and performance bonuses, plus some back payments.
A bonuses figure in payroll records doesn’t show whether the payment recurs. Read the contract or the employer’s letter before you count it. Here’s a labelled pair for a client whose latest payslip shows a $15,000 sign-on bonus.
- Incorrect: add $15,000 a year to assessable income because the payslip shows it.
- Correct: record it as a one-off payment and leave it out of assessable income.
Servicing, also called serviceability, is the lender’s test of whether the client can afford the repayments. Before you calculate anything, record these facts about the bonus.
- The scheme terms, from the employment contract or bonus plan.
- Whether the employer decides the amount, and whether it can cancel the bonus.
- How often it’s paid, such as yearly, half-yearly or quarterly.
- The employer, the client’s role and how long they’ve held it.
- Each past payment, with its date and amount.
- Whether the latest amount is in line with past payments, with the reason for any jump or fall.
The last point decides the most. A latest bonus that is the highest in the client’s history overstates their income under any rule that uses it alone.
Compare History Rules
Lenders compare bonus history in different ways. Some average two years of payments, some take the lower of two figures, and Macquarie sets no averaging period at all. The table names each lender’s current policy document and its date.
| Lender | History needed | Amount used | Allowance |
|---|---|---|---|
| Macquarie, 10 September 2026 guidelines | Evidence of the most recent payment or payments | No averaging period set. The bonus must be consistent, ongoing and a condition of employment | Up to 80% |
| MyState and Auswide, procedure effective 1 July 2026 | Two years of yearly or half-yearly payments | The lower of the two-year average or the latest payment annualised | 80% |
| BankVic, July 2026 guidelines | A bonus in each of the previous two financial years | The lesser of the prior financial year or the average of the previous two years | No percentage stated in its bonus rule |
| Pepper Money Prime, 21 August 2026 guide | Two years of payments from the current employer | The average of the last two years | 100% |
The allowance is the share of the bonus the lender counts in servicing. Shading is the part it leaves out, so an 80% allowance shades the bonus by 20%.
Annual and Irregular Bonuses
An annual bonus needs two payments to show a pattern at three of these four lenders. MyState asks for two years of bonus payments, which means two yearly or four half-yearly payments. BankVic’s broker underwriting guidelines ask for a bonus in each of the previous two financial years.
Lower-year treatment differs. BankVic takes the lesser of the prior financial year and the two-year average, so a falling bonus is assessed at its lower year. MyState takes the lower of the two-year average and the latest payment annualised, so a rising bonus is held to its average.
A bonus paid more often uses a shorter history at MyState. A quarterly bonus needs one year of payments, and MyState uses the lower of the 12-month average or the latest payment annualised. MyState treats a monthly bonus as commission, which the commission income guide explains.
An irregular bonus, such as an occasional project payment, has no regular pattern to average. BankVic counts a bonus only when it is regular, ongoing and in line with industry expectations. Macquarie asks for a consistent, ongoing payment that is a condition of employment.
Macquarie sets no history period for bonuses. Its three-month year-to-date (YTD) payslip rule for overtime and commission doesn’t apply to bonuses, which have their own rule in its guidelines.
A Changed Employer or Scheme
A change of employer or bonus scheme can reset the history a lender relies on. Pepper Money’s product guide counts a bonus at 100% for Prime loans only when it has been received for the last two years from the current employer. Pepper’s Near Prime, Near Prime Clear and Specialist loans need the bonus demonstrated over the last 12 months.
For a client who has just changed jobs, bonuses from the previous employer don’t count toward Pepper’s two years. Their history starts with the new employer’s first payment.
A changed scheme matters even with the same employer. MyState’s 80% allowance applies on the basis that the terms of payment and potential payment remain the same. If the employer has raised the target, changed the formula or moved from yearly to quarterly payments, the old history no longer shows what the new terms pay.
Ask the employer for a letter that states the current scheme terms and the date any change took effect. That letter is the record that connects past payments to the scheme the client is on now.
One Applicant, Three Lenders
This fictional example applies three lenders’ rules to the same client in October 2026. Priya is an account manager at a freight company, where she has worked since July 2023. Her base salary is $117,000 a year from 1 July 2026.
Her contract makes her eligible for an annual performance bonus with a target of 15% of base salary. The company sets the amount from the previous financial year’s profit and her performance rating, and pays it each August. She has received three bonuses.
| Paid | Amount | Financial year of payment |
|---|---|---|
| 30 August 2024 | $16,000 | 2024-25 |
| 29 August 2025 | $12,000 | 2025-26 |
| 21 August 2026 | $20,000 | 2026-27 (year to date) |
Priya has had the same employer and bonus scheme for all three payments, so she meets each lender’s continuity rule. Macquarie asks for six months in the current job or the same industry, and BankVic asks for three months in the current position. MyState’s allowance needs unchanged bonus terms, which her employer confirms.
Each lender reaches a different usable bonus from these payments.
| Lender | Calculation | Usable bonus | Assessable income with base salary |
|---|---|---|---|
| Macquarie | No averaging period. 80% of the latest $20,000 is $16,000, if that payment is accepted as consistent | Up to $16,000 | Up to $133,000 |
| MyState and Auswide | Average of the last two payments is $16,000. The latest annualised is $20,000. The lower figure is $16,000, and 80% of it is $12,800 | $12,800 | $129,800 |
| BankVic | The prior financial year, 2025-26, is $12,000. The two-year average of $16,000 and $12,000 is $14,000. The lesser is $12,000 | $12,000 | $129,000 |
The usable bonus ranges from $12,000 to $16,000, so up to $4,000 of income separates the lenders. The 2025 dip drives the BankVic figure. The $20,000 payment falls in the current financial year, so BankVic’s method doesn’t use it yet.
Macquarie’s figure depends on the latest bonus being consistent. Priya’s history includes a year $4,000 below the first, so the employer’s explanation of that year belongs in the file.
Document the Assessment
Document the assessment by tying each bonus to a source record and checking that the records agree. The payment date, not the performance year, decides which financial year’s records show a bonus. Priya’s August 2026 bonus rewards her 2025-26 performance but appears in her 2026-27 YTD pay.
The Averaging Record
MyState’s 1 July 2026 procedure averages the last two payments, so the file needs a dated record of each one. This record supports the $16,000 average and the $12,800 usable bonus at MyState.
| Payment | Date | Amount | Source record |
|---|---|---|---|
| Earlier of the two | 29 August 2025 | $12,000 | Payslip dated 29 August 2025 and the 2025-26 income statement |
| Latest | 21 August 2026 | $20,000 | Payslip dated 21 August 2026 and the YTD total on the latest payslip |
| Average | $16,000 | ($12,000 + $20,000) / 2 | |
| Usable at 80% | $12,800 | $16,000 x 80% |
For BankVic, the records change. Its July 2026 guidelines ask for two payslips, one from each of the previous two financial years, that confirm the bonus. Two years of full tax returns are the alternative.
Priya’s payslips of 30 August 2024 and 29 August 2025 meet that rule. Her August 2026 payslip shows the current year’s bonus, which BankVic’s calculation doesn’t use.
Reconcile the Records
Check that each record agrees with the others before you rely on the bonus. Priya’s records reconcile like this.
| Record | What it shows | Reconciliation |
|---|---|---|
| Payslip dated 18 September 2026 | YTD gross of $47,000 | Six fortnightly pays of $4,500 since 1 July 2026, plus the $20,000 bonus |
| 2025-26 income statement | Gross pay of $124,000 | $112,000 base salary plus the $12,000 bonus paid on 29 August 2025 |
| 2024-25 income statement | Gross pay of $122,000 | $106,000 base salary plus the $16,000 bonus paid on 30 August 2024 |
| Employer letter dated 15 September 2026 | Scheme terms and every bonus paid to Priya | Each listed payment matches a payslip and falls in the right income statement |
If the YTD total doesn’t match the pays and bonuses you can see, find out why. Typical causes are a back payment, a salary rise during the year or a bonus paid in a different month. Find the cause and record it before you count the bonus.
Priya’s 2025 bonus fell to $12,000 because the company missed its profit target that year. Her employer’s letter states that and confirms the scheme terms haven’t changed since she started in July 2023. With no change in employer or scheme, the three payments are comparable.
If the letter had shown a new scheme, the payments before the change would describe different terms. You’d then rely on the payments made under the current scheme and the employer’s statement of its terms.
Evidence Each Lender Accepts
Each lender lists the documents that prove a bonus.
- Macquarie’s 10 September 2026 guidelines accept an employer letter on letterhead or a payslip confirming the payment. The latest financial year’s ATO income statement, payment summary or tax return is also accepted.
- MyState accepts payslips, payment summaries, employer letters or similar documents.
- BankVic asks for a payslip from each of the previous two financial years confirming the bonus, or two years of full tax returns.
- Pepper Money’s 21 August 2026 guide adds an ATO payment summary, tax return or notice of assessment to the standard documents. That applies when the client relies on variable income such as a bonus.
- Westpac’s minimum required documents checklist, as at October 2026, asks for one payslip plus a YTD income statement. Alternatively, one YTD payslip covering at least three months, no more than two months old at formal approval, is enough.
Westpac’s three-month YTD option doesn’t fit Priya’s file in October 2026. Her 18 September payslip covers about 11 weeks of the financial year, so a Westpac file would use a payslip plus the YTD income statement. The YTD payslip guide explains how YTD figures are read.
Prepare the Submission
Prepare the submission by writing a file note that states the usable bonus, the excluded portion, the dated policy source and what remains uncertain. The note lets the lender’s assessor follow your figure without rebuilding it.
Under the responsible lending obligations, credit licensees make reasonable inquiries about the client’s financial situation and take reasonable steps to verify it. The Australian Securities and Investments Commission (ASIC) Regulatory Guide 209, issued 9 December 2019, sets out ASIC’s guidance on those obligations. Your file note records how you verified the bonus.
For a MyState application, Priya’s file note could read as follows.
Bonus income: annual performance bonus under the employment contract, paid each August, amount set by the employer. Payments of $16,000 (30 August 2024), $12,000 (29 August 2025) and $20,000 (21 August 2026) are verified by payslips, income statements and an employer letter dated 15 September 2026. Usable bonus is $12,800: 80% of the $16,000 two-year average, which is lower than the latest payment annualised. Excluded portion is $7,200 of the latest $20,000 payment. Policy source is MyState Mortgage Lending Procedure, broker version 1.0a, effective 1 July 2026, section 7.2.6. Remaining uncertainty: the August 2027 amount isn’t known and the employer sets it each year. The employer confirms the scheme terms haven’t changed since July 2023, and the 2025 fall followed a missed company profit target.
Write the excluded portion as a dollar amount. An assessor reading “$12,800 bonus” can’t tell whether you averaged, shaded or did both, but “$7,200 excluded” shows what you left out.
Name the policy source with its version and date. Lenders update these documents during the year, and the date shows which rule you applied.
Bulma’s Policy Advisor quotes the bonus policy wording it relied on and shows the date Bulma last updated that policy. You can copy both into the file note beside the lender’s own document date.
Choose the lender after you’ve calculated the usable bonus under each rule. When the bonus is needed to pass servicing, the averaging rule can decide the application. For Priya, Macquarie counts up to $4,000 more bonus income than BankVic, provided her latest bonus is accepted as consistent.
