Contract income is common in Canberra, government and specialist contracting especially, and it’s assessed quite differently from lender to lender. The same day rate can produce very different serviceable-income figures depending on the policy applied.
A worked example
A contractor on a $900 day rate, five days a week, works out to roughly $234,000 a year at face value. One lender’s policy might annualise that figure directly, provided the contract has enough time remaining and a renewal history. Another might apply a more conservative multiplier, ask for two consecutive contracts in the same field before counting it in full, or want a longer minimum remaining term than the current contract actually has. The same contractor, the same rate, two different assessable incomes, sometimes a six-figure difference in what the servicing calculator will actually use.
What tends to matter
- Day rate vs annualised income, how the rate is converted into a yearly figure isn’t standard across lenders
- Remaining contract term, some policies want a minimum number of months left on the current contract at the time of assessment
- Renewal history, a track record of consecutive contracts, especially with the same or a related employer, can carry real weight in some policies
- Industry and contract type, government contracting, IT contracting and other specialist categories are sometimes treated as distinct categories again, with their own evidence requirements
- PAYG contract vs true self-employed contractor, whether you’re on a contractor’s payroll (PAYG) or invoicing through your own ABN changes which evidence set applies entirely
What to prepare
- Your current contract, including start and end dates
- Previous contracts, particularly if they show a consistent renewal pattern
- Recent payslips or remittance advices showing the rate actually being paid
- If invoicing through an ABN: recent BAS and, depending on trading history, financial statements, see the self-employed guidance for what that involves
Treatment varies notably between lender policies, which is exactly why the same contractor can get a materially different servicing outcome from one lender to the next, it’s rarely about whether contract income is “acceptable” in general, but which specific policy fits the contract you actually have.
Next step: talk with KartikKumar about your contract’s specific terms and renewal history before applying anywhere.