For anyone whose income includes overtime, penalties, commission or a contract, the employer letter is frequently the most valuable document on the file.
Your role, start date and whether you are permanent, on probation or on contract; your base salary; and how regular any overtime, penalties, allowances or commission are. For parental leave it confirms your return date and hours.
A precise letter can bring variable income into the assessment that a vague one leaves out.
Part of the employment and income home loans guide.
Where you are on probation, the letter should say whether it has completed and when, and confirm the role is permanent.
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[Company letterhead] [Date] To whom it may concern Re: Confirmation of employment and income for [Full name of employee] I confirm the following in respect of the above employee: Position: [Job title] Employment type: [Permanent full-time / permanent part-time / fixed-term contract / casual] Commenced: [Start date] Probation: [Not applicable / completed on (date) / due to complete on (date)] Hours: [Ordinary hours per week] Base salary: $[Amount] per annum, excluding superannuation Additional income: Overtime: [Regular and ongoing / occasional]. Averaged $[Amount] per annum over the last [12/24] months. Shift or award penalties: [Rostered and ongoing / not applicable]. Averaged $[Amount] per annum over the last [12/24] months. Allowances: [Description]. $[Amount] per annum. Commission or bonus: [Contractual under the employment agreement / discretionary]. Averaged $[Amount] per annum over the last [12/24] months. I confirm this income is expected to continue at similar levels, and that the employee's position is not under notice. [For parental leave, add:] The employee is currently on approved parental leave and is due to return on [date], in the position of [title], working [hours] per week, at a salary of $[amount] per annum. Yours faithfully _______________________________ [Name] [Position] [Contact phone and email]
Before you use this. Your employer may prefer their own wording, and that is fine. What matters is that the specific items above are covered. Never ask an employer to state something that is not accurate; lenders verify these letters by phone, and an inaccurate letter is far worse for you than a conservative one.
Charles Touma, Mortgage Broker.
Where you are on probation, the letter should say whether it has completed and when, and confirm the role is permanent. Where you are on a fixed-term contract, it should state the end date and, if applicable, the history of renewals.
Lenders reading contract work sensibly care about continuity, and a letter that evidences a pattern of renewal is worth having.
Include the return date, the position, the hours and the salary on return. That paragraph is what allows the more accommodating lenders to assess you on your return-to-work income rather than your reduced income today. The parental leave page covers how that assessment works.
Frequently yes, as a standard verification step. That is why the letter must be accurate and why the contact details on it should be someone who can confirm what it says.
It is not a sign of suspicion; it is routine for any file where income is confirmed by letter rather than by payslips alone.
Almost always. The letter confirms the arrangement; the payslips evidence what has been paid. For variable income most lenders want two years of payslips plus both PAYG summaries alongside the letter, because the letter describes the structure and the payslips prove the pattern.
It is more common than you would think, particularly at large organisations with rigid HR processes. Payslips, PAYG summaries and an employment contract can carry much of the weight, and some lenders accept a payroll-generated statement instead. It narrows the options rather than closing them.
Yes: providing a draft is normal and often welcomed, as long as everything in it is accurate and the employer is confirming it.
What you must never do is put figures or descriptions in front of them that are not true. Lenders verify, and an inaccurate letter is a far bigger problem than a lower borrowing figure.
Generally yes, or sent from a verifiable company email address. Lenders are checking the letter is genuine as much as reading what it says, so anything that supports authenticity, letterhead, a named signatory, direct contact details, helps.
Charles can tell you which lenders read your kind of income at full value, and what the letter needs to say for them.
Prefer a callback?Charles calls back within one business day.
General information only, not credit, legal or financial advice. This is a starting point, not a legal document. Lender requirements differ and change, and some lenders provide their own form that must be used instead. Confirm what your lender requires before relying on any template.
