Overtime, commissions and bonuses, your lender won’t count your best year
Planiprêt | 02 November 2026
Claudie is a nurse. For the past two years, she has taken on a lot of overtime, and her evening and weekend premiums add up on top of her base salary. Her 2025 T4 shows $90,000. This year, at her current pace, she expects to go past $100,000. That was the number she had in mind when she started house hunting.
The lender used $87,000. It didn’t question her hours. It simply did what most lenders do with variable income: look at the last two full years and take the average.
The gap in Claudie’s file
Income she had in mind (2026 pace): $100,000
Income on her latest T4 (2025): $90,000
Income on her 2024 T4: $84,000
Income used by the lender (average of 2024 and 2025): $87,000
A $13,000 gap in annual income is enough to change the price range you can aim for. Better to know it before falling in love with a house.
Why the lender doesn’t just take your best number
Your base salary is set out in your employment contract. Overtime, commissions and bonuses can vary from year to year, and sometimes disappear. The lender has to assess your ability to repay over several years, so it looks for the part of your income that is regular and likely to continue.
Federally regulated lenders are required, under Guideline B-20 from the Office of the Superintendent of Financial Institutions (OSFI), to verify income rigorously. For variable income, that verification relies mainly on history: the longer and more consistent it is, the more comfortable the lender is counting it.
How each type of variable income is usually treated
- Overtime: generally accepted when there is a regular history, most often over two years, supported by T4s and pay stubs.
- Shift premiums (evening, night, weekend): often seen as more stable when they appear on every pay stub, since they are tied to the position’s schedule.
- Commissions: accepted with a history. When they make up a large share of income, the lender often asks for the last two years of Notices of Assessment, somewhat like for a self-employed person.
- Annual bonuses: a bonus written into the contract or paid every year carries more weight than a one-time bonus paid at the employer’s discretion.
These practices are common, but they are not identical from one lender to the next. That is exactly where things get interesting.
When variable income goes down
Claudie’s file is favourable because her income is rising. If her 2025 T4 had been lower than her 2024 one, many lenders would not have averaged them. They would have used the lower year instead, and sometimes asked for an explanation of the drop.
The logic is simple: a downward trend suggests income could keep decreasing. An exceptional year followed by a return to normal doesn’t count the way you might hope.
Situations that reset the clock
A variable income history is tied to your job. Some changes can mean the lender can no longer rely on it, at least for a while:
- changing employers, even in the same field, since overtime or commissions at the old employer aren’t guaranteed at the new one;
- a new position paid mainly on commission;
- moving to part time or voluntarily cutting back on overtime;
- returning from an extended leave, which creates a gap in recent history.
In these cases, the lender may count only the base salary until a new history is established. If you are planning one of these changes, talk to us before it happens, not after.
What lenders don’t all do the same way
For the same file, one lender may average the last two years, another may give more weight to the most recent year, and a third may use the lower year. With less than two years of history, some count part of the variable income, others only the base salary.
For someone whose income is mostly fixed, these differences matter little. For someone with a large variable share, they can change how much you can borrow. Because we work with several lenders, we can present your file to the one whose method best reflects your reality.
How to prepare your file
- Gather your T4s and Notices of Assessment for the last two years.
- Keep your recent pay stubs, which show this year’s income and how regular it is.
- Ask for an employment letter that separates base salary from variable income and states whether your position is permanent.
- If you are paid on commission, keep your commission statements.
- Set your purchase budget based on your average income, not your best month or this year’s pace.
- Before cutting your hours or changing positions during the buying process, let’s talk.
Key takeaway
Your variable income counts, but rarely at the amount you have in mind. The lender looks at your history, not your best year. Knowing this from the start keeps you from shopping above your real budget, and gives us time to find the lender that will treat your income most fairly.
Your variable income counts, but rarely at the amount you have in mind. The lender looks at your history, not your best year. Knowing this from the start keeps you from shopping above your real budget, and gives us time to find the lender that will treat your income most fairly.
Let’s talk it through together. As you probably already know, our services are free.
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