Income and Qualification
Your base salary may only tell part of the story. If overtime, bonuses, commission, shift premiums, or other variable earnings make up a meaningful part of your income, the amount a lender can use may be different from what you actually earn.
Start With the Income
The history behind variable income matters, especially when overtime, bonuses, commission, or other earnings are needed for qualification.
The lender may look at whether the income has been stable, increasing, or declining rather than relying only on your latest paycheque or highest-income year.
Before planning around one income number, look at how the income is earned, how long you've been receiving it, and what the documentation supports.
The Situation
Maybe your employment letter says you earn $70,000 a year, but overtime is a regular part of your job and your actual income has been quite a bit higher.
Or part of your income may come from annual bonuses, commission, shift premiums, or another source that changes from year to year.
That income may still help you qualify. How much can be used depends on the type of income, how long you've been earning it, and what your income history shows.
A Common Example
Base salary
$70,000
Regular overtime
Varies
Actual income
Higher
The income used for qualification may be higher than your base salary.
That doesn't mean the lender will simply use your latest or highest income figure. We still need to look at the history behind it.
How It May Be Reviewed
When part of your income changes from year to year, the lender may look back at your earnings to decide what amount can be used for qualification. A higher current year can help, but it doesn't automatically replace the history behind it.
A longer history can make it easier to show that bonuses, commission, shift premiums, or other variable earnings are a regular part of your income rather than a one-time increase.
The lender may compare more than one year and look at whether the income has been stable, increasing, or declining. The pattern can matter just as much as the average.
Your current job, role, pay structure, and recent earnings can help show whether the income you're relying on is still being earned.
Pay information, employment documents, tax slips, tax returns, and other records may be needed depending on how you're paid and which lender is reviewing the application.
For overtime, I would generally plan on needing a two-year history.
Bonuses, commission, shift premiums, and other variable income can be reviewed differently. The lender will still look at the history, whether the income is continuing, and what the documentation supports.
Not All Variable Income Looks the Same
Two people can earn the same total income and still have very different mortgage applications. The lender needs to understand where the income comes from and which parts can be used for qualification.
Regular overtime can be used for mortgage qualification, but I would generally plan on needing a two-year history.
A recurring bonus may be usable when there's enough history to show that it's an established part of your compensation.
Commission income can absolutely be used, but how you're paid and how long you've been earning it become especially important.
Shift premiums, stat pay, allowances, and other variable earnings may also help, depending on how regularly you've received them.
A Simple Example
Imagine someone has a $70,000 base salary and has also earned regular overtime for at least two years.
Their total income was $88,000 in 2024 and $94,000 in 2025. That history may allow the lender to use more than the $70,000 base salary when qualifying them.
Base salary
$70,000
Current guaranteed salary
2024 income
$88,000
Includes overtime
2025 income
$94,000
Includes overtime
In a straightforward rising-income example like this, that history may support using more than the base salary. The lender will still confirm the current employment and make sure the overtime is continuing before deciding what income can be used.
This example is for illustration only. Actual income treatment depends on the income type, documentation, lender, and overall application.
When Income Is Changing
Sometimes your current income is much stronger than the history behind it. Maybe you were promoted, started receiving more regular overtime, moved into a stronger commission role, or began earning a larger recurring bonus.
That increase matters, but it may take time before the stronger income is fully reflected in the amount a lender can use.
The opposite can matter even more. If your overtime, bonus, or commission has recently dropped, the lender may not simply rely on an older, higher average.
The direction of the income matters because the lender is trying to decide what amount is realistic to use going forward.
A stronger current year can help, but the lender may still need enough history before the full increase becomes useful for qualification.
If recent earnings are lower than previous years, the lender may take a more cautious approach rather than relying on the older, higher income.
A promotion, new position, new employer, or different compensation structure can change how the income needs to be reviewed.
Sometimes the issue isn’t the income itself. It’s that there isn’t enough history yet to support the new number.
Waiting can sometimes change the answer.
If your income has recently increased, another year of history may materially improve what can be used. If it has declined, waiting won't necessarily solve the problem, so I'd want to understand the reason for the change first.
Check the Income First
If you know how you're paid and roughly what your income has looked like over the last two years, I can help you figure out which number makes sense to use for planning.
Common Questions
Once we know what kind of income you earn and what the history looks like, these are some of the details that can still change how it's treated.
A job change doesn't automatically mean your variable income can't be used, especially if you're doing similar work and the way you're paid hasn't changed much. The lender will want to understand the new role, your compensation structure, and whether the income history still makes sense in the new position.
A leave or interruption can affect the income history, but the reason matters. Maternity or parental leave, illness, seasonal work, or another temporary interruption may need to be explained so the lender can understand whether the lower income was temporary or reflects what you're earning now.
A guaranteed bonus can be different from a discretionary annual bonus. If the amount and conditions are clearly documented in your employment agreement, the lender may be able to review it differently from a bonus that depends on company or individual performance.
Commission-only income can still be used, but the lender will usually want a strong documented history. Tax returns, tax slips, current earnings, and the way the commission is paid may all become more important when there isn't a base salary underneath it.
A lower current year can matter even if the previous two years were stronger. The lender may want to understand why the income has dropped and whether the change is temporary or likely to continue before deciding what amount can be used.
The exact documents depend on how you're paid and the lender reviewing the application. Pay information, an employment letter, tax slips, tax returns, Notices of Assessment, and other income records may be requested.
Yes. If a refinance depends on overtime, bonuses, commission, or other variable income, it's worth confirming what income can be used before planning around the amount of equity you want to access.
Helpful Resources
Once you have a realistic idea of the income a lender may be able to use, these tools can help you see how that number affects qualification and what may still need to be confirmed.
If a lender would not use enough of your overtime, bonus, or commission income and the mortgage was declined, see what may be worth reviewing before trying another lender.
Mortgage Tool
Estimate the household income that may be needed for a purchase based on the home price, down payment, housing costs, rate, and monthly debts.
Mortgage Tool
See how the income a lender can use works together with your housing costs and other debts when calculating mortgage qualification.
Mortgage Minute
Understand what a pre-approval can tell you and why the income used still needs to be confirmed with supporting documents.
Mortgage Minute
See why changes to income, employment, debt, credit, or the property itself can still affect a mortgage after pre-approval.
Let's Look at the Numbers
If part of your income comes from overtime, bonuses, commission, shift premiums, or another variable source, I can help you sort through the history and figure out what number makes sense to use for planning.
If you have your recent pay information and a rough idea of what you earned over the last two years, that's usually a good place to start.