PAYG Income
Income received as a Pay As You Go employee where tax is withheld by the employer before the wage is paid.
In detail
PAYG is the Australian tax system for employees. Employers withhold income tax from each pay and remit it to the ATO. From a lending perspective PAYG income is the most straightforward income type to verify because payslips, employment contracts, and bank statement salary credits are all readily available.
Lenders typically require the two most recent payslips plus a year to date income figure that aligns with the tax period. Many lenders will also accept a recent payment summary or ATO income statement for the previous financial year when year to date data is thin early in a new tax year.
Why it matters for brokers
PAYG income is the starting point for most serviceability calculations. Getting the base salary right and cross checking it against bank credits and YTD figures avoids discrepancy flags later in the assessment process.
Example in practice
A broker collects two payslips dated October showing a fortnightly gross of $4,615. Annualised that is $120,000. The YTD gross from the same payslips shows $35,000 over 7 pay cycles, which annualises to $120,770, within expected tolerance. The base salary is accepted at $120,000.
Related terms
Year to Date (YTD) Income
The cumulative gross income an employee has earned since the start of the financial year, shown on each payslip.
Base Salary
The fixed regular component of a PAYG employee income, excluding overtime, bonuses, commissions, and allowances.
Overtime Income
Pay received for hours worked beyond a standard contract, usually at a penalty rate above base hourly pay.
ABN Income
Income earned by a sole trader, partnership, company, or trust operating under an Australian Business Number.
Ready to assess faster?
Assess documents for mortgages in minutes, not hours.