Reviewing Employment Letters for PAYG Applications
Employment letters fill gaps that payslips and bank statements cannot cover. They confirm tenure, probation status, and employment type in a format lenders accept.
When an employment letter is needed
Lenders usually request an employment letter when the borrower has started a new job recently, when they are still within a probation period, when they are on a fixed term contract, or when the income includes significant variable components that need explanation. Some lenders require a letter on every PAYG file by policy.
What a compliant employment letter contains
The letter should be on company letterhead with author contact details. It needs to confirm the employee name, role title, start date, employment type, probation status, base salary, and any confirmed variable components. It should be signed and dated within the past 30 days in most cases. A phone number that a lender can call to verify is essential.
Common issues and how to resolve them
Letters without contact details, letters that do not confirm probation status, and letters that mix old and new details are all common issues. Request a replacement rather than trying to patch up a deficient letter. A clean letter sent back saves hours of assessor clarification time later.
Key takeaways
- ✓Request an employment letter whenever tenure or probation matters
- ✓Check for letterhead, contact details, and a recent signature
- ✓Confirm the letter explicitly addresses probation status
- ✓Request a replacement for letters that miss critical fields
How QualifyMate helps
QualifyMate identifies employment letters as part of the document pack so brokers can quickly confirm whether one has been provided alongside payslips and bank statements when assessing PAYG income.
Key terms
Related guides
Reading Payslips for Home Loan Applications
A practical guide to reading Australian payslips for mortgage applications. What to verify, what to cross check, and what to query.
Verifying Self Employed Income for Home Loan Applications
A workflow for verifying self employed income on mortgage files. Documents to collect, structures to understand, and assessments to run.
Spotting Income Discrepancies Before Submission
A practical guide to catching income discrepancies on mortgage files. Cross checks between payslips, bank statements, and tax returns.
Handling Multiple Employer Income in Mortgage Applications
How to handle borrowers with income from multiple employers. Consolidation rules, lender treatment, and documentation tips.
Ready to assess faster?
Assess documents for mortgages in minutes, not hours.