How Lenders Assess Overtime Income for Home Loans

Lenders count overtime income for a home loan when the payslips show it’s regular and ongoing. They then average it over a set period and shade it to a usable figure. Macquarie, MyState and BankVic each use 80% of regular overtime for most employees and 100% for workers in occupations each lender lists, such as police and health workers.

For most employees, the averaging rule moves the figure more than the shading rate, because these lenders all shade their overtime at 80%. The length of year-to-date (YTD) pay on the latest payslip decides whether a lender annualises this year’s overtime or falls back to last year’s. One fictional employee below ends up with $5,349 more usable overtime at two lenders than at a third.

Identify the Payment

Overtime is pay for hours worked beyond the employee’s scheduled hours, paid at or above the base rate. Base pay covers the scheduled hours. An allowance is a separate payment for a condition of the job, such as a car, tools or working shifts.

The split matters because lenders shade each payment differently. Under Macquarie’s 10 September 2026 residential credit guidelines, shift allowances count at 100% when they’re a condition of employment and industry standard. Fixed allowances, such as a car or phone allowance, can count as base income there.

MyState’s mortgage lending procedure, effective 1 July 2026, treats penalty payments and shift allowances like overtime. It uses 80% of them and calculates them the same way. A part-time employee’s hours above their contracted minimum also go through MyState’s overtime rules, not its base pay rules.

Read each payslip line by line and sort every amount into one of four groups.

Payslip line	Group	Example treatment
Ordinary hours, salary or contracted part-time hours	Base pay	100% at Macquarie and MyState
Extra hours, overtime at time and a half or double time	Overtime	80% for most employees at Macquarie and MyState
Shift, penalty or weekend loading	Shift allowance or penalty	100% at Macquarie as a condition of employment, 80% at MyState
Car, phone, tool or uniform allowance	Fixed or other allowance	100% at Macquarie, subject to its conditions

Commission and bonuses follow their own rules, which the bonus income guide covers. Pay from a second employer is assessed as a second job, not as overtime. The second job guide explains those rules.

Australian Lender Treatment

For a home loan with overtime income in Australia, the lenders compared here differ most on how much YTD pay they need before annualising current overtime. Macquarie and BankVic annualise after 3 months of YTD pay, while MyState waits for 6 months. Before that point, each lender turns to last financial year’s overtime in its own way.

Rule	Macquarie	MyState	BankVic
Policy date	10 September 2026	1 July 2026	July 2026
Minimum history	6 months in the current job, or 6 months in the same field in a prior role	Over 6 months in the job in total to use prior-year overtime	At least 6 months with the employer to average across two financial years
Shading for most employees	80%	80%	80% for non-core members
Higher rate	100% for listed essential services	100% for listed essential workers with 6 months YTD	100% for core members
YTD needed to annualise	3 months	6 months	3 months
Below that YTD	Prior-year income statement, tax return or June payslip, then the lower of annualised YTD or prior-year income	Prior-year overtime, worked out from the months employed last year	Overtime on the current payslip, then the prior-year figure
Continuity test	Regular, ongoing and evidenced	Investigate when the two latest payslips average over 20% below the YTD average	Regular, ongoing and in line with industry expectation
Payslips	Two, latest within 60 days and oldest within four months	Two, within 30 days	One for core members, two with 3 months YTD otherwise, within five weeks

Macquarie’s 10 September 2026 guidelines limit essential services to public transport operations, fire fighters, health services, garbage or sewerage services, prison officers, police and power or energy technicians. Electricians are excluded.

MyState’s 1 July 2026 procedure lists frontline healthcare, residential care and disability support workers as essential workers. Its list also covers police, protective services officers, fire and rescue employees, paramedics, Australian Border Force, Australian Defence Force and corrective services employees.

BankVic’s July 2026 broker underwriting guidelines define core members by their main occupation. That covers police, emergency services and health workers. Every other employee is a non-core member at BankVic, with 80% of overtime counted.

The occupation lists differ between lenders. Westpac’s healthcare and essential trades home loan page says eligible professionals could have 100% of overtime and allowances assessed, as at October 2026. That page names electricians and plumbers, while Macquarie’s list leaves electricians out.

Worked Example: One Employee at Three Lenders

This fictional example applies each lender’s rules to the same employee. Jordan is a full-time warehouse team leader who has worked for the same distribution company since February 2023. None of the three lenders lists the role for its 100% rate.

Jordan’s base salary is $78,000 a year, paid at $3,000 a fortnight. The final payslip for the 2025-26 financial year shows $15,600 of overtime for that year. That’s an average of $600 a fortnight.

The broker submits the application on 15 October 2026. The latest payslip covers the fortnight ending 6 October 2026 and shows 14 weeks of YTD pay from 1 July. YTD overtime is $6,000.

Lender	YTD rule triggered	Overtime figure used	Usable overtime	Assessed income
Macquarie	14 weeks is over 3 months, so YTD is annualised	$6,000 x 52 / 14 = $22,286	80% = $17,829	$95,829
BankVic	14 weeks is over 3 months, so YTD is annualised	$22,286	80% = $17,829	$95,829
MyState	14 weeks is under 6 months, and Jordan worked all of last year	Total 2025-26 overtime of $15,600	80% = $12,480	$90,480

Assessed income here is the $78,000 base salary plus the usable overtime. Macquarie and BankVic count $5,349 more of Jordan’s overtime than MyState does. The loan serviceability guide explains how that income difference flows through to borrowing power.

BankVic also needs Jordan’s final 2025-26 payslip or 2025-26 PAYG summary, because the application falls in the first six months of the financial year.

Check Consistency

Check consistency by matching each payslip’s YTD totals to the pay periods behind them. Then compare the current year’s overtime rate with last year’s. A YTD figure that doesn’t add up, or a rate that has jumped, changes the figure a lender will accept.

Start with the arithmetic. Jordan’s payslip for the fortnight ending 22 September 2026 shows YTD overtime of $4,500. Adding the $1,500 of overtime from the 6 October payslip gives $6,000, which matches the latest YTD line.

Base pay needs the same check. Seven fortnights at $3,000 is $21,000, and the payslip shows $21,000 of YTD base pay. If a YTD figure doesn’t reconcile, find the cause before you annualise it, such as a back payment or a pay period missing from the count.

A Recent Spike in Shifts

Jordan’s $6,000 of YTD overtime isn’t spread evenly. The first five fortnights paid $600 each, matching last year’s rate. The last two paid $1,500 each, because Jordan covered extra shifts during the warehouse’s peak season.

Those two fortnights lift the annualised overtime from $15,600 to $22,286. At Macquarie and BankVic, that adds $5,349 of usable income. Macquarie’s 10 September 2026 guidelines count overtime only when it’s confirmed as regular and ongoing, and BankVic’s July 2026 guidelines use the same test.

Ask Jordan’s employer whether the extra shifts continue. If they ended with the peak season, the annualised $22,286 overstates Jordan’s ongoing overtime. Using last year’s $15,600, which matches the first five fortnights, gives $12,480 of usable overtime at 80%.

Neither Macquarie’s nor BankVic’s guidelines set a method for removing a temporary spike. Agree the figure with the lender’s business development manager (BDM) in writing before you submit.

When Overtime Falls

The opposite pattern draws a different check.

MyState’s 1 July 2026 procedure asks for investigation when the two latest payslips average materially less overtime than the YTD average. It gives a fall of more than 20% as an example. The broker then gives mitigating commentary for MyState to consider.

Macquarie’s guidelines also call for caution when either of the two payslips shows no overtime at all. The same applies when the work is seasonal. If annual leave caused the gap, explain it in the notes and point to the leave shown on the payslip.

The YTD payslip guide explains how lenders treat a short YTD period in July, August and September. Casual employees face separate history rules, which the casual employment guide covers.

Record the Usable Figure

Write the usable figure into the file notes with every input an assessor needs to repeat your calculation. That means the source documents and their dates, the amounts you excluded and why, the calculation method and any written lender confirmation.

Westpac’s minimum required documents checklist, as at October 2026, asks brokers to identify every income component the bank accepts for serviceability. It also asks them to confirm the payslip period, gross and net pay, tax paid and YTD. A file note built this way answers those questions before the assessor asks.

For Jordan’s MyState application, the file note sets out these entries.

Entry	Jordan’s file note
Source documents	Payslips for the fortnights ending 22 September and 6 October 2026, and the final 2025-26 payslip
Policy relied on	MyState mortgage lending procedure, effective 1 July 2026, overtime section
YTD period	14 weeks from 1 July 2026, under MyState’s 6-month threshold
Calculation method	Total 2025-26 overtime of $15,600, as Jordan worked the full year, shaded to 80%
Excluded amounts	Current-year overtime, including the $3,000 paid in two peak-season fortnights
Usable figure	$12,480 of overtime plus $78,000 base salary, giving $90,480
Lender confirmation	Not needed, because the policy sets the method for this YTD period

Name the lender’s policy and its date in each note, because a later policy update can change the result. Bulma’s Policy Advisor answers overtime questions for one lender or across 52+ lenders and quotes the policy wording behind each answer. It also shows the date Bulma last updated that policy, so you can copy both into the file note.

Keep the BDM’s email with the file whenever the lender agreed to a figure its written policy doesn’t set. For Jordan’s Macquarie or BankVic application, that’s the email agreeing to $15,600 of overtime instead of the annualised $22,286. With that record in place, you can submit the usable figure the lender has already accepted.