What is a Year To Date Calculator?
A year to date calculator or YTD calculator is a tool used by lenders to work out your annual income from the income you earned in a part of a year. It is sometimes referred to as an income annualisation calculator.
The lender will either use the YTD gross income figure from your most recent payslip, the gross income stated in your last group certificate or the ATO Income Statement (obtained from myGov website).
In most cases, the banks will calculate your income from both your payslip and group certificate. They will use the lower of the two incomes in their assessment.
How do I use the calculator?
Follow the steps below to use the year to date income calculator:
- Find your most recent payslip and your group certificate from the most recent financial year.
- Enter the data from these documents into the calculator.
- The ‘end date of most recent payslip’ refers to the end of the pay period, not the date you were paid. For example, if the pay period was ’06/06/2010 to 12/01/2017′ and the pay date was ’15/01/2017′, you would enter ’12/01/2017′ in the calculator.
- If you have only just started your job this financial year or don’t want to work out your income from your group certificate then just enter ‘0’ as the ‘gross income shown on your last group certificate.’
- Click calculate, and the calculator will then work out your annual gross income.
- You can now deduct your base pay from this figure to work out the amount you receive each year in overtime, pre-tax allowances and other income types.
If you have any questions about using the calculator, please post a question on our home loan forum.
How is YTD calculated from July to September?
The financial year begins in July so most payslips have their YTD figure reset on the 1st of July each year.
Normally, the YTD income contains several months income. However, in July, August and September it doesn’t.
As a result, lenders can’t determine your annual income using the YTD income shown on your payslips alone.
A small amount of time off work or a few extra days of overtime would greatly affect their calculation of your annual income.
Because of this some lenders will ask for your group certificate from the previous financial year and use it to calculate your income.
Group certificates will show a full years income if you’ve worked there for the entire financial year or the date that you started with that employer which can then be used to calculate your year to date income.
As group certificates are being phased out, customers can go to MyGov to download their income statement or payment summary, if they do not have a group certificate.
For more information on accessing your payment summary, please visit ATO’s website here.
How will the lenders assess my income?
Did you know that only a few lenders will accept 100% of any extra income that you earn as part of your pay packet?
Each lender takes a very different approach to how they rely on the following types of income and allowances:
- Shift allowances
- Income for casual employees
- Commission income
- Company car
- Workers’ comp
- Maternity leave income
- Salary sacrifice
- Income from a second job
For July to September each year, it’s best practice to submit the group certificate / PAYG summary as well as the 2 most recent payslips to most lenders if you are using income other than base income, i.e. overtime/allowance/bonus/casual etc.
The policy of lenders varies on this. Many smaller lenders require a 1 to 2-year history of other income types so would need extra documents regardless of the time of year.
Our mortgage brokers are experts in helping people with these income types to get approved for a home loan.
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To find out exactly how much you can borrow based on your YTD income, please call us on 1300 889 743 or fill in our free assessment form and one of our mortgage brokers will call you to discuss your situation.