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You have been putting in the hard yards. You are picking up weekend shifts, hitting sales targets to earn commissions, and putting in extra overtime to build up your house deposit faster.
When you look at your year-to-date earnings on your payslip, the total number looks fantastic. But when you sit down to apply for a mortgage, will the bank actually lend to you based on that higher total, or will they only look at your flat base salary?
The short answer is: yes, extra income can count—but banks rarely treat it with the same simplicity as a standard base salary.
If you rely on overtime, bonuses, commissions, or allowances to boost your take-home pay, here is a high-level, easygoing look at how New Zealand lenders evaluate variable earnings, and how we help make sure your hard work counts.
Why banks look at variable income differently
When a bank credit assessor reviews your income, their main goal is simple: they want to be confident you can comfortably afford your mortgage repayments not just during your best months, but through quieter times as well.
- Base salary: Lenders view this as predictable and secure. As long as you remain in your role, that set amount arrives in your account every pay cycle.
- Variable income: Overtime, bonuses, and commissions are viewed as welcome extras, but inherently less predictable. If market demand cools, your employer cuts overtime, or you have a slower sales quarter, that extra cash flow can drop.
Because of that uncertainty, banks look for consistency over time. They want proof that your extra earnings aren't just a brief spike, but a dependable part of your regular income.
How banks assess overtime: track record and timing
If you work in an industry where overtime is practically part of the job description—such as healthcare, policing, construction, or manufacturing—lenders are generally very open to including it in your borrowing calculations.
However, how much of it they will count depends heavily on which bank you approach. Different lenders apply very different rules:
- The 3-month snapshot: A small number of flexible lenders might only ask to see your last three months of payslips or bank statements to establish a consistent pattern. In their view, what you are earning right now is the most relevant reflection of your current role.
- The 6-month average: Other lenders prefer to take an average of your overtime over the last six months, smoothing out any higher or lower weeks into a realistic monthly baseline.
- The 12-month standard: Many mainstream retail banks take a more conservative route. They will review your earnings over a full 12-month period (often via an IRD summary of earnings) to verify that the overtime is genuinely ongoing rather than a short-term seasonal rush.
Commissions vs bonuses: how lenders treat performance pay
While both feel like well-earned rewards in your bank account, credit assessors view sales commissions and annual bonuses through slightly different lenses.
Sales commissions
If a significant portion of your income comes from commission or performance targets, lenders know that monthly figures can fluctuate.
Bonuses
Bonuses are often linked to overall company profitability rather than just your personal effort. If your employer has a challenging financial year, bonus pools can be reduced or put on hold.
Because of this, banks are fairly cautious with bonus income. They usually look for a consistent history of receiving that bonus over the last one to two years with the same employer. One-off sign-on bonuses or unexpected discretionary payouts are typically left out of ongoing servicing calculations.
What about work allowances?
Many Kiwis receive regular allowances alongside their salary—such as shift allowances, tool allowances, or vehicle allowances. Whether a lender includes these in your borrowing power usually comes down to whether the payment is taxable:
Finding the right calculator for your pay structure
If your pay packet includes multiple moving parts, walking into a single bank branch can be hit-or-miss.
At Home Loan Factory, our job is to look at your payslips, understand your true earning pattern, and match your application with the specific lender whose calculator treats your extra income most favourably.
Does your pay packet include overtime, commissions, or allowances? Get in touch with the team at Home Loan Factory today to find out exactly how much a bank will let you borrow.
