The fundamental challenge with casual income is that it has no contractual guarantee of continuity. Lenders compensate for this uncertainty by requiring a track record before they will count it. The standard benchmark is 12 months of continuous employment with the same employer. A small number of lenders will consider 6 months, but typically only for borrowers with strong credit histories and substantial deposits.
When assessing how much casual income to count, lenders average the income over the employment period rather than using your most recent payslip. This means seasonal income spikes do not inflate the assessment, but it also means a borrower whose hours have recently increased will be assessed on the lower historical average rather than their current earnings level.
The same-employer rule matters more than people expect. If you have been casual for two years but changed employers partway through, most lenders reset the clock at the point you moved. The two-year history is counted from the start of your most recent employer relationship, not from when your casual career began.
Contract workers are assessed differently from casual employees. A casual worker has an indefinite engagement with no guaranteed hours; a contract worker has a fixed-term agreement with specific terms. Lenders generally view contract income more favourably than casual income when there is a strong renewal history - multiple back-to-back contracts in the same field signal that demand for your skills is consistent.
For contractors who are currently between contracts or within 3 to 6 months of contract expiry, lenders may require evidence that renewal is likely. This typically means demonstrating industry demand, a letter from the employer or recruiter confirming likelihood of renewal, or a history of short gaps between contracts that were quickly filled.
IT professionals, engineers, healthcare workers and other specialists who contract within high-demand industries tend to be assessed more generously than those in cyclical or discretionary sectors. The lender is trying to answer one question: will this person continue to earn this income after settlement? Evidence that the market consistently demands your skills is the most persuasive answer.
The major banks generally apply the strictest standards to casual and contract income. They have rigid policy frameworks that require the full 12-month same-employer history and do not typically make exceptions. Smaller banks, mutual lenders and specialist non-conforming lenders often have more flexible policies - some will accept 6 months with the same employer, or will allow industry continuity rather than employer continuity for contractors.
This is precisely where a mortgage broker adds genuine value. We know which lenders on our panel are most likely to approve your specific situation, and we can present your application in the strongest possible light to the most appropriate lender rather than sending you to one of the majors whose policy does not suit you. Applying to the wrong lender and being declined can also affect your credit score, making the next application harder.
The documentation requirements for casual and contract income are more extensive than for permanent employment. At a minimum, most lenders will require: the two most recent consecutive payslips showing consistent hours and the employer name, your most recent group certificate (payment summary) or tax return covering the employment period, and a letter of employment from your employer confirming your ongoing engagement.
For contract workers, you will also need a copy of your current contract and ideally copies of previous contracts demonstrating the renewal history. If you are close to contract expiry, a letter from your employer or recruiter confirming the likelihood of renewal can support the application significantly.
If you have changed employers in the past 12 months, gather documentation from both employers if possible. Some lenders will consider industry continuity across employers in certain professions. The more clearly you can document the continuity and reliability of the income, the stronger your application becomes.
Jason and Steve are Adelaide mortgage brokers who give honest advice at no cost to you. No obligation.
The information on this page is general in nature and does not constitute financial advice. Given Finance Pty Ltd (t/a Lendology) ACN 624 144 501 is authorised under LMG Broker Services Pty Ltd ACL 517192.