How Lenders Assess Foreign Income for a Home Loan

A foreign income home loan uses overseas earnings that the lender converts to Australian dollars, shades for currency risk and verifies against payslips, statements and translated records. The amount left after that process is the income the lender uses to test whether your client can afford the loan.

The same overseas salary can produce different assessable income at different lenders. Macquarie’s 10 September 2026 guidelines count 80% of converted foreign salary. Bluestone’s Expat Investment loan counts up to 90% of net foreign income as at October 2026, so the lender’s method changes borrowing power before any other policy applies.

Classify Overseas Earnings

Classify overseas earnings by source first, because each lender sets separate rules for foreign employment, business and rental income. Record these details for every source before you choose a lender.

Detail	What to record	Why it matters
Employer or payer	Legal name and country	Macquarie prefers a recognisable employer
Currency	The currency the income is paid in	Macquarie accepts nine currencies for foreign salary
Tax basis	Gross or net, and where tax is paid	Lenders differ on shading the gross or net figure
Payment frequency	Weekly, fortnightly, monthly or annual	Frequency decides how you annualise the income
Income type	Salary, business, rental, pension or variable pay	Each type has its own evidence and shading rules

Foreign Salary

Macquarie’s 10 September 2026 guidelines treat salary from a foreign employer as PAYG income when your client lives at a current Australian residential address. Pay as you go (PAYG) income is wage or salary income from an employer. Macquarie limits this route to PAYG employment and prefers a recognisable employer.

Variable pay sits under the same route at Macquarie, with an extra haircut. Overtime, commission and bonuses take their normal PAYG haircut as well as the foreign income haircut.

Other Overseas Earnings

Outside employment, Macquarie accepts foreign annuity, pension, rental and investment income. Macquarie counts 80% of that income when the previous two years of Australian tax returns show it consistently. It can’t be the sole source or the majority of the income needed for servicing.

Macquarie’s foreign income guidelines list no foreign business income type, and its foreign-employer route covers PAYG employment only. For a client running a business overseas, you need a lender whose policy names self-employed foreign income. As at October 2026, Bluestone’s Expat Investment loan accepts self-employed income from Australians living overseas.

The self-employed home loan guide explains how lenders read business financials, which applies to overseas businesses too.

At Macquarie, rent from an overseas property falls under that 80% rule for other foreign income. As at October 2026, Westpac’s minimum documents checklist asks for six months of bank statements showing consistent foreign rental credits. The rental income home loan guide covers how lenders shade rent.

Convert and Shade

Convert foreign income to Australian dollars at a dated exchange rate, then apply the lender’s shading percentage to the converted amount. Shading, also called a haircut, is the share of income a lender leaves out to allow for currency movements.

Macquarie’s 10 September 2026 guidelines accept foreign salary paid in GBP, EUR, HKD, NZD, SGD, USD, CAD, JPY or CHF. Macquarie uses only 80% of the amount after conversion at current exchange rates. Its guidelines name no rate provider, so record the rate, its source and its date in the file.

Tax Basis

Lenders differ on whether they shade gross or net income. Bluestone’s Expat Investment loan page, as at October 2026, counts up to 90% of net foreign income and calculates no extra Australian tax on it. It applies a flat 10% shade to all foreign income.

Bluestone’s product is for Australians living overseas, which the Australian expat home loan guide covers in full. For a client living in Australia, the ATO’s tax residency page says an Australian resident for tax purposes must declare all income earned in Australia and overseas. That’s why the foreign salary appears in your client’s Australian tax return as well as on their overseas payslips.

Worked Example: A US Salary

This fictional example converts a US salary under Macquarie’s foreign income rules. Priya is an Australian citizen living in Brisbane. She works remotely for a US software company that pays her in US dollars.

Priya’s employment contract sets a base salary of US$120,000 a year and makes an annual bonus of US$12,000 a condition of employment. She has received the bonus each year. Her salary is paid monthly, and each payslip shows gross pay of US$10,000 and net pay of US$7,150 after her employer’s deductions.

Priya’s broker prepares the file on 30 September 2026.

The broker uses the Reserve Bank of Australia (RBA) daily exchange rate for 30 September 2026. The RBA’s indicative rate that day was A$1 = US$0.6977. Each step below is rounded to the nearest dollar.

Step	Base salary	Bonus
Gross income in US dollars	US$120,000	US$12,000
Converted at A$1 = US$0.6977	$171,994	$17,199
Macquarie’s 80% bonus haircut	Not applied	$13,759
Macquarie’s 80% foreign income haircut	$137,595	$11,007
Assessable income	$137,595	$11,007

Priya’s assessable income is $148,602 a year before tax. Without any haircut, her converted pay would be $189,193. Macquarie shades both amounts and the bonus twice, which removes $40,591.

The haircut applies to her converted gross pay. Her net pay is the figure to check against her bank statements, and her Australian tax return later shows the salary she declared.

The rate date changes the result. If the Australian dollar rose to US$0.7077 before assessment, Priya’s base salary would convert to $169,563, and her assessable base salary would fall by $1,945 to $135,650.

Verify the Documents

Check payslips, statements and translated records against each other before you submit, because each lender reads them to confirm the same income from separate sources. The payslip shows what the employer pays, the bank statement shows what arrives and the tax documents show what was declared.

Payslips, Contracts and Statements

Macquarie’s 10 September 2026 guidelines verify foreign salary with two computer-generated PAYG payslips. The latest can be no more than 60 days old and the oldest no more than four months old. Each payslip must show the applicant’s name, the employer, the pay period and both gross and net pay, ideally with year-to-date income.

At Macquarie, one payslip can be enough when a signed employment contract shows the start date and base income. For a bonus, Macquarie accepts an employer letter, a payslip showing the payment or the latest year’s tax return.

As at October 2026, Westpac’s minimum documents checklist asks for two consecutive foreign payslips or one year-to-date payslip covering two pay cycles. It also needs an account statement covering at least three months of consistent salary credits. Foreign pensions need a government letter and three months of statements.

For an ANZ foreign income home loan, ANZ’s home loan checklist asks for evidence of foreign income, generally covering the last three months, as at October 2026.

Translations and Certification

Macquarie’s 10 September 2026 guidelines need every income document in English or translated into English. The translation must carry a certificate from a registered licensed translation service domiciled in Australia.

Macquarie also needs independent legal and financial advice for every non-English speaking borrower, with a translation certificate. As at October 2026, Westpac asks for its Translation Checklist from BrokerHub whenever foreign income is used.

The National Accreditation Authority for Translators and Interpreters (NAATI) is Australia’s certifying authority for translators. Its online certification check shows whether a translator’s credential is current, since NAATI credentials expire unless renewed every three years.

Reconcile Gross and Net Income

Work through the figures in this order, so that each one has a second document behind it.

1. Match gross pay on the payslip to the salary in the employment contract, adjusted for pay frequency.
2. Match year-to-date gross pay to the number of pay periods so far, to confirm the annual figure.
3. Match net pay on the payslip to the salary credits on the bank statement.
4. Match the foreign salary to the Australian tax return where the lender reads tax returns.

When salary arrives in a foreign currency account, the credit usually matches net pay, less any receiving-bank fee. When the employer pays into an Australian dollar account, the credit is net pay converted at the transfer rate, less any fees. Record the rate on each credit, so the assessor can see why the amounts differ slightly.

Resolve Discrepancies

Resolve each mismatch before you submit, because an unexplained difference makes the assessor question the income.

Discrepancy	Likely cause	Fix
Name differs between passport and payslip	Transliteration or a missing middle name	Ask the employer for a letter confirming both spellings
Employer name differs between contract and payslip	Parent company and payroll entity	Get a letter linking the two entities
Bank credits vary month to month	Conversion rate or transfer fees	Show the rate and fee for each credit
Gross pay doesn’t match the contract	Pay rise, allowance or unpaid leave	Get the latest contract variation or an employer letter
Translated figures differ from the original	Translation error	Return the document to the translator for correction

Connect Income to Eligibility

Keep the foreign income calculation separate from the citizenship, visa, property and government-approval tests, because those tests decide the whole application. A lender can accept your client’s foreign salary and still decline the loan on residency.

Macquarie’s 10 September 2026 guidelines show this split. Its foreign salary route depends on a current Australian residential address, while a separate residency matrix decides who can borrow. A temporary visa holder living in Australia and applying alone falls outside Macquarie’s guidelines, whatever their income.

Run those whole-application tests through their own guides. For Australians living overseas, use the Australian expat home loan guide. For visa holders, use the temporary resident mortgage guide or the non-resident home loan guide, and check FIRB approval for foreign buyers.

From Accepted Income to a Servicing Result

A foreign income mortgage in Australia moves through four steps before it reaches a servicing result.

1. Classify each source and confirm the lender accepts that income type.
2. Convert accepted income at a dated exchange rate and apply the lender’s shading.
3. Add the assessable foreign income to any Australian income.
4. Run servicing with the lender’s living expenses, buffer and existing commitments.

Servicing is the lender’s test of whether your client can afford the repayments, which the loan serviceability guide explains. In Priya’s case, $148,602 enters Macquarie’s servicing calculator as her assessable income.

Lender Settings Differ

Accepted currencies, income shading and maximum loan-to-value ratio (LVR) differ between lenders, so confirm all three for each application. LVR is the loan amount as a percentage of the property’s value.

Macquarie’s 10 September 2026 foreign income rules add no separate LVR cap, so its standard limits by loan purpose apply. Bluestone’s Expat Investment loan caps the LVR at 80%, as at October 2026. Salary paid in a currency outside Macquarie’s list of nine falls outside its foreign salary rule, however strong the income.

Bulma’s Policy Advisor compares foreign income rules across 52+ lenders in one answer, with a side-by-side table of currencies, shading and LVR limits. It names the lenders whose policy doesn’t address the point and quotes the policy wording behind each answer.

Verify the Tax Identification Number

A tax identification number (TIN) is the number a country’s tax authority uses to identify a taxpayer, and a lender asks for it when your client has foreign tax ties. The foreign TIN appears on overseas tax returns and other tax documents, so the assessor can match those records to your client.

The ATO’s foreign tax resident reporting page says financial institutions must ask new account holders to certify their tax residence. A foreign tax resident provides their TIN or equivalent, or a reason if they don’t have one.

Foreign TINs and Australian Identifiers

A foreign TIN comes from the tax authority of the country where your client pays tax. In the United States, the Social Security Administration issues the Social Security number, and the IRS issues the other taxpayer identification numbers. The IRS says a TIN must appear on returns, statements and other tax documents.

Australian identifiers in the same file do different jobs.

Identifier	Issued by	What it identifies
Foreign TIN	The overseas tax authority	Your client in that country’s tax system
Tax file number (TFN)	Australian Taxation Office (ATO)	Your client in Australia’s tax and super systems
Australian Business Number (ABN)	The ATO, recorded on the Australian Business Register	A business in dealings with the ATO and government
Lender reference number	The lender	The loan application, as on Westpac’s documents checklist as at October 2026

Australia’s TIN

Yes, Australia’s TIN is the tax file number. The OECD’s TIN information sheet for Australia names the TFN as Australia’s TIN. It describes an eight or nine digit number, usually shown as three groups of three digits, such as 123 456 789.

The ATO’s what is a tax file number page says a TFN is usually nine digits and stays the same for life. Applying for one is free.

To find a TFN, sign in to ATO online services through myGov or the ATO app. The ATO’s lost or stolen TFN page also lists the notice of assessment, ATO letters, employer income statements and super statements.

There’s no public TFN check. The OECD sheet says TFN verification is limited to registered employers and super funds, while anyone can search an ABN on the Australian Business Register’s ABN Lookup.

Locate the Accepted Identifier

Find the foreign TIN on an official record from the overseas tax authority, such as a tax return or assessment notice. Use that country’s tax authority website to confirm which number it treats as the TIN, since some countries issue more than one.

Ask the lender which field holds the foreign TIN and which document it accepts as proof. The tax residency your client declares is their own statement, so a question about where they are a tax resident goes to their tax adviser.