How Self-Employed Income

is Assessed

When you’re self-employed, income is usually assessed differently than PAYG employment. This can be confusing — especially when business income doesn’t follow a simple, consistent pattern.

This page explains how lenders typically assess self-employed income, what factors are commonly considered, and why outcomes can vary — without providing credit advice or recommendations.

Why self-employed income is treated differently

Unlike PAYG income, self-employed earnings are often:

  • Variable from year to year
  • Structured through a business entity
  • Influenced by expenses, reinvestment, and tax decisions

Because of this, lenders generally look beyond recent earnings and focus on patterns, consistency, and sustainability over time.


Common business structures and how they’re viewed

The way income is assessed often depends on how the business is structured. At a high level:

Sole traders

Income is usually based on the individual’s net business income after expenses.

Companies

Assessment may involve:

  • Salary or wages paid to directors
  • Dividends received
  • Company financial performance

Trusts and partnerships

Income may be distributed differently depending on trust deeds, partnership agreements, and historical distributions.

Assessment approaches can differ significantly depending on structure and lender policy.


Financial information commonly reviewed

While requirements vary, lenders often request a combination of the following:

  • Business financial statements
  • Personal and business tax returns
  • Notices of assessment
  • Business Activity Statements (BAS)
  • Accountant-prepared documentation

The time period reviewed and the weighting given to each document can vary.


Consistency and sustainability matter

Rather than focusing on a single year, lenders often look for:

  • Income consistency across multiple periods
  • Stability of the business
  • Ongoing viability of the industry

Irregular income does not automatically mean an application is unsuitable — but it does mean assessment is more nuanced.


Why outcomes can differ between lenders

There is no single, universal way self-employed income is assessed.

Differences can arise due to:

  • Internal lender policies
  • Risk appetite
  • Industry exposure
  • How income add-backs are treated

This is why preparation and understanding are important before any formal application or advice stage.


Preparing before seeking personalised advice

Understanding how income is typically assessed can help you:

  • Identify potential gaps early
  • Prepare relevant information
  • Ask better questions when speaking with a licensed professional

Education doesn’t replace advice — but it can make future conversations clearer and more productive.


Continue learning

If you’d like to explore the broader process or understand how to prepare: