PolicyMatch Brief

Depreciation and other add-backs: why there’s no simple “net profit plus add-backs” formula

Your accountant’s “net profit” figure and a lender’s usable servicing income are not the same number. Lenders can add back certain non-cash or discretionary items to get closer to your real cash-generating capacity, but which items, and at what value, genuinely differs by lender. PolicyMatch will never publish a calculator that auto-totals every possible add-back and calls it your income.

Common potential add-backs, and their real conditions

ItemWhat lenders show
Director salary/wagesAccepted in many policies where not already counted separately elsewhere in the application
DepreciationWidely considered, but several policies cap it (commonly around 20%) or restrict it for capital-intensive/critical business assets, not simply added back in full
InterestOften added back only where the related debt is already included in servicing, or is being refinanced/paid out
Voluntary superannuationCommonly limited to contributions above the compulsory statutory amount
Non-recurring expensePotentially acceptable with an explanation and accountant evidence, but it must genuinely be non-recurring
Non-recurring incomeFrequently deducted rather than treated as ongoing income, the opposite direction to an expense add-back
Lease/hire purchaseTreatment differs; some policies add the expense back only while the corresponding liability is still being serviced

The honest sequence

Accounting result → potential adjustments → the specific lender’s method → usable servicing income. Skipping straight from your accountant’s net profit figure to a headline “income” number is exactly the mistake this page exists to help you avoid, and exactly what a generic online add-back calculator does.

What to prepare

  • Full financial statements, not just a profit summary
  • A schedule from your accountant identifying which items are genuinely non-cash or non-recurring
  • Details of any related business debts that pair with an interest or lease add-back

Next step: see the full add-backs bridge in the Scenario Lens‘s Self-employed tab, then talk with KartikKumar before assuming any particular add-back will be accepted.

General information only, correct at time of writing, and not personal financial advice. Speak with KartikKumar Patel about how this applies to your situation.

Have a scenario?

Start with the details that actually matter.

Tell me what you’re trying to do. We can work out what needs to be checked before you spend time on the wrong option.