Calculate your Self-Employed Income



Powered by:
Powered by savings image Savings.com.au
Savings.com.au Pty Ltd ACN 161 358 363 | Australian Financial Services Licence and Australian Credit Licence 515843

Home loan comparison

Lender

Variable
More details

loans.com.au – Variable Home Loan (LVR < 90%)

    Variable
    More details

    HSBC – Home Value Home Loan (Principal and Interest) (LVR < 80%)

      Fixed
      More details

      Newcastle Permanent – Fixed Rate Home Loan (Principal and Interest) 1 Year

        Variable
        More details

        Beyond Bank – Purple Basic Variable Home Loan (New Customer) (LVR 60%-80%)

          Variable
          More details

          Athena – Straight Up Owner Occupied - Celebrate (LVR 50%-60%) (Principal and Interest)

            Fixed
            More details

            IMB Bank – Fixed Rate Home Loan (Principal and Interest) 1 Year (LVR ≤ 80%)

              Variable
              More details

              Liberty Financial – Liberty Low Rate Home Loan (LVR < 95%)

                Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to be made on variables as selected and input by the user. Some products will be marked as promoted, featured or sponsored and may appear prominently in the tables regardless of their attributes. All products will list the LVR with the product and rate which are clearly published on the product provider’s website. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. *The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Rates correct as of July 25, 2024. View disclaimer.

                Powered by:
                Powered by savings image Savings.com.au
                Savings.com.au Pty Ltd ACN 161 358 363 | Australian Financial Services Licence and Australian Credit Licence 515843

                Purchase: Self-Employed Income Calculator

                This calculator gives an estimate of self-employed business income.

                Assumptions

                The calculator assumes that:

                • You have been self-employed for two years or more
                • Depreciation, additional super contribution, and one-off expenses are add-backs for the purpose of calculating your business income;
                • A lender will use your most recent tax return to calculate business income. However, if the business income is a 20% or more increase on the business income from the previous year, then the calculator assumes that a lender will use the average income from the past two years' tax returns.

                Personal income is the total of the taxable income, rental income, and any other income input by the user.

                Assessable income is the total of the personal income and business income.

                How is my Self-Employed Income Assessed?

                When borrowing money from a bank or a lender, a self employed person's income will be open to interpretation. Banks and lenders will always look on the historical figures and use this to assess your income.

                To have a figure or an amount for your income, banks use your tax return from the previous years (in most cases the last two years) and add back things like depreciation, one off expenses and any additional superannuation you paid.

                How to Show your Proof of Income

                Below are some proof of income that self employed people can use to verify financial stability when applying for a loan.

                Wage and Tax Return Statement

                Wages and Tax Statement is a legal document and one of the most reliable proof of income for self employed people. It can help to prove that you are a tax payer with a stable earning from your business or a self employed job.

                Profit and Loss Statement

                This is a statement that summarizes your costs, expenses, and revenues of your business. This can be helpful especially when applying for a loan as it demonstrates you business' earning capabilities and could show how economical you are when handling loss.

                Bank Statements

                Your bank statement can also be a good proof if income especially if you have a history of consistent and regular deposits. When using your bank statements as proof of your income, it's best to have a separate account for your business, ensuring this business account is not used for any personal expenses.

                Self Employment Income Calculator FAQs

                To calculate your gross monthly income for self employment, you can add up your total sales revenue and deduct any refunds, the costs of goods or any service expenses from it. The total and final figure would be your gross income.

                Lenders use your net income as a self employed individual. This is the total amount you have earned after deducting any relevant business expenses.

                Yes, some lenders will offer you a mortgage after being self employed for only a year. However in most cases a lender will require you to be self employed for a minimum of 2 years in order to approve your loan application.

                Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to made on variables as selected and input by the user. All products will list the LVR with the product and rate which are clearly published on the Product Provider’s web site. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. Rates correct as of 9 July 2024.

                ^The addition of offset sub-account means your comparison rate will change.

                Powered by:
                Powered by savings image Savings.com.au
                Savings.com.au Pty Ltd ACN 161 358 363 | Australian Financial Services Licence and Australian Credit Licence 515843