How lenders calculate self-employed income

Lenders add back depreciation, one-off expenses, director loans and certain superannuation contributions to your taxable income. Done right, the difference is 20% of your borrowing capacity.

11 min readBy Daniel WongStage 4 of 6

Your tax return shows the income you optimised down. The lender wants to see the income you actually earn.

The four common add-backs

Depreciation (non-cash). One-off expenses (legal fees, restructure costs). Director loan adjustments (treating drawings as income). Discretionary superannuation contributions above 11.5%.

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WARNING: This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Comparison rates are calculated on a secured loan of $150,000 over 25 years for home loans and a loan of $30,000 over 5 years for car and personal loans, unless the lender states another basis. Business loans and equipment finance for a business purpose have no mandatory comparison rate.