$114,000 on the payslip. $86,000 in the lender's calculator. Same nurse, same roster, and nobody changed her job: a line of credit policy changed her income.
Banks call it shading. Put bonus and overtime income on a home loan application and most lenders will count 80% of it, some want two years of history before they count a cent, and a few will take the lot. The lender you pick can swing your borrowing power by six figures before rates even enter the conversation.
The timing sharpens it. The RBA lifted the cash rate in February, March and May 2026, held at 4.35% in June, and meets again on Tuesday 11 August 2026. Rising rates thin out the competition at open homes, which favours anyone still buying, but they also shrink borrowing capacity at the same time as APRA's debt-to-income caps, live since 1 February 2026, push lenders to be choosier about which income they count. Variable income is where they get choosy first. Each shaded dollar now costs you more capacity than it did a year ago.
Why do banks shade bonus and overtime income?
Base salary is contractual. Overtime is not. A lender writing a 30-year loan wants income it can still see in year three, and credit policy treats anything above base as income that could evaporate: rosters change, bonus pools shrink, a new manager kills the double shifts. Shading to 80% is the standard hedge.
The upshot for you is bigger than it sounds. Two lenders can read an identical payslip and land on assessable incomes thousands of dollars apart, and because your maximum loan runs off assessable income tested under the APRA 3% serviceability buffer, every dollar of that gap gets multiplied roughly six times into borrowing power. Choosing the lender is choosing the income figure.
Assessors don't take your word for the overtime, either. The standard method is to annualise the year-to-date figure on your latest payslip, check it against last financial year's income statement, and run with the lower number. One quiet quarter can mark down a whole year.
How much of your overtime and bonus actually counts?
Policies differ between lenders and move without announcement, so treat these as typical at the time of writing, not a promise:
| Income type | Typical assessment | Evidence lenders ask for |
|---|---|---|
| Base salary | 100% | Two recent payslips |
| Overtime and penalty rates | 80% at most lenders; 100% under some essential-services policies | 3–6 months of payslips plus last year's income statement |
| Bonus | 50–80%, usually averaged over two years | Two years of evidence; the lower year often wins |
| Commission | Around 80%, averaged over 6–12 months | Payslips plus employment contract |
| Shift and industry allowances | 80–100% where they're ongoing | Roster, award or enterprise agreement |
Shading is one input into the number a lender will hand you. The full machinery is in how banks calculate your borrowing capacity.
Which workers get 100% of their overtime counted?
A carve-out most borrowers never hear about: several lenders assess overtime and penalty rates at 100% for essential-services workers, typically nurses, midwives, paramedics, police and firefighters, because rostered overtime in the public hospital system is structural, not optional.
They're right. Overtime on a hospital roster isn't fragile income. The staffing gaps that generate it have outlived three governments. Credit policy at most banks hasn't caught up with the award; at a few, it has, and knowing which is which is the whole game.
Hospital doctors sit in a similar spot, with unrostered overtime and on-call loadings that generalist lenders routinely shade, and specialist medico policies that treat them properly. Add salary packaging into the mix, standard across Queensland Health and most public hospitals, and the gap between lenders who understand a health payslip and those who don't widens again. Sales professionals get no carve-out: commission is averaged, usually over two years, so a strong recent run helps less than you'd hope.
One payslip, three lenders, $168,000 apart
Kirra is an ICU nurse at Townsville University Hospital: $86,000 base plus $28,000 in overtime and penalty rates last financial year, consistent across two years, though she moved hospitals 18 months ago.
Lender one wants two years of overtime history with the same employer. She's six months short, so it assesses base only: $86,000, roughly $516,000 in borrowing capacity.
Lender two shades overtime to 80%: $108,400 assessable, roughly $650,000.
Lender three runs an essential-services policy and takes 100%: $114,000 assessable, roughly $684,000.
Same person, same payslip, same deposit. The spread between her worst lender and her best is about $168,000 of borrowing power, which in Townsville is the difference between a unit and a house.
Based on typical scenarios, assuming roughly $6 of capacity per $1 of assessable income under the 3% buffer. Individual outcomes vary.
What should you do before you apply?
Keep the roster steady. Lenders read your last three to six months of payslips, so the classic mistake is dropping shifts to house-hunt in exactly the window that sets your assessable income. Gather last year's income statement, recent payslips and your roster or enterprise agreement before anyone asks.
If you're refinancing, the same rules bite from the other direction. The barrier isn't your current bank; it's the new lender's assessment, and overtime that carried your original approval gets re-shaded on the way in. That's a lender-matching problem, and refinancing with the right match solves it.
Matching is the part worth outsourcing. The Wity Borrowing Power Assessment models your capacity across 45+ lenders with each lender's actual treatment of your overtime, bonus and packaging applied, so you know whether you're Kirra's $516,000 or her $684,000 before anyone touches your credit file.
Want to know what your payslip is worth to the right lender? Start the Wity questionnaire → Free, no credit check, two minutes.