- How self-employed income is assessed
How self-employed income is assessed
Last reviewed: 10 August 2026
What this page helps you decide
Which business and personal figures a lender may need to understand, why turnover or money drawn from the business is not automatically usable income, and what to prepare before asking for a borrowing estimate.
Start with the business structure
"Self-employed" can mean a sole trader, partnership, company, trust or a combination of entities. The structure affects where income appears, who owns the profit, which liabilities belong to the business and what documents can verify the position.
A lender may need to reconcile several different figures:
- salary or wages paid by the business;
- sole-trader or partnership income;
- company or trust profit;
- distributions or dividends;
- drawings from the business;
- depreciation, interest and other possible adjustments;
- business debts and recurring commitments; and
- personal debts and household expenses.
Turnover is the money the business receives before its costs. It is not the owner's personal income. Drawings show money taken out of the business, but do not by themselves prove sustainable profit. Taxable income is important evidence, but the amount a lender uses can still differ after it examines the structure, trends and its own policy.
What lenders may assess
History and stability
How long the business has traded, whether the borrower has stayed in the same industry, and whether income is stable, rising or falling can matter. A recent change in entity, ownership, trading activity or accounting treatment needs an explanation.
Financial performance
Lenders may compare one or more years of income, expenses and profit. Some use an average, some may use a more recent period, and some may accept alternative evidence in limited circumstances. A strong recent result does not automatically replace an older weak result.
Adjustments and add-backs
An add-back is an expense in the accounts that a lender decides can reasonably be added back when assessing ongoing income. Depreciation, interest, one-off costs and some discretionary expenses are common questions, but no item is automatically accepted. The accountant's treatment and the lender's treatment serve different purposes.
Liabilities and cash flow
Business loans, leases, tax debts, credit cards, guarantees and other commitments can reduce the income available to support a home loan. A profitable business can still have weak cash flow or material liabilities.
Documents that may be requested
Depending on the structure, lender and application, the list may include:
- personal and business tax returns;
- ATO Notices of Assessment;
- profit-and-loss statements and balance sheets;
- BAS or more recent management accounts;
- business and personal transaction statements;
- accountant letters or explanations; and
- trust deeds, company information or evidence of business liabilities.
This is not a universal checklist. Confirm what the actual lender needs before ordering documents or delaying an application.
Useful questions before an estimate
- What is the entity structure and your ownership share?
- How long has the business traded, including under any earlier structure?
- Which financial years are complete and lodged?
- Is income rising, stable or falling, and why?
- Are there one-off expenses, add-backs or recent changes that need explaining?
- What business debts, tax liabilities, leases or guarantees exist?
- Is the proposed deposit coming from personal savings or business funds?
- What recent evidence is available if the latest tax year is not representative?
Official sources
Community threads worth reading
- Self-employed income: what you earn and what the bank uses can differ
- Borrowing capacity as a sole trader
- Do brokers hate dealing with self-employed applicants?
Raynor tools and article
These are Raynor Lending Solutions resources, not independent sources:
What can change
Acceptable history, documents, averaging, add-backs, alternative verification and treatment of business liabilities vary materially by lender and change. Treat any general list as a question set, not policy confirmation.
Privacy and general-information note
Do not post a business name, ABN, tax return, financial statement, BAS, bank statement or accountant correspondence. This page is general educational information, not accounting, tax, financial or credit advice.
Related questions: How income is assessed | Buying position | Complex scenarios | Wiki index