Overtime, On-Call Allowances, Locum Income & More Explained.
As a medical professional, your income often looks very different from a standard PAYG employee.
Your earnings may include:
- Overtime
- Shift penalties
- On-call allowances
- Private practice income
- Locum income
- Contractor earnings
- Multiple employers
The good news?
Many lenders will consider these income sources when assessing a home loan application.
The challenge is that not all lenders assess medical income the same way, which can have a significant impact on your borrowing capacity.
Understanding how banks assess medical income can help you choose the right lender and avoid unexpected borrowing limitations.
Why Medical Professionals Are Different
Unlike many professions, healthcare income is often made up of multiple income streams.
A registrar may receive:
- Base salary
- Overtime
- Shift loadings
- On-call payments
A specialist may receive:
- Hospital income
- Private practice income
- Contractor earnings
- Trust distributions
A locum doctor may receive:
- Multiple contracts
- ABN income
- PAYG income
- Varying work patterns
While these income streams may be regular and reliable for you, lenders assess each component differently when determining serviceability.
Does Overtime Count Towards Borrowing Capacity?
Usually, yes.
Many lenders will consider overtime income if it can be demonstrated as consistent and ongoing. However, the amount recognised varies significantly between lenders.
Some lenders may:
- Use 100% of overtime income
- Use 80% of overtime income
- Average earnings over a period of time
- Apply more conservative assessment methods
Lenders typically want evidence that overtime is a regular part of your employment rather than a one-off increase in earnings. Consistency and income history are key factors.
Why This Matters
A doctor earning:
Base Salary: $150,000
Overtime: $30,000
Could receive very different borrowing outcomes depending on how much of that overtime a lender chooses to recognise.
Do Banks Count On-Call Allowances?
Sometimes.
On-call income is common among doctors, specialists and other healthcare professionals.
Whether a lender includes this income generally depends on:
- How long it has been received
- Whether it can be evidenced
- How regularly it appears
- Individual lender policy
Some lenders may consider a significant portion of ongoing on-call income, while others may apply discounts or exclude it altogether.
This is one reason why lender selection can be particularly important for medical professionals.
What About Shift Penalties and Allowances?
Healthcare workers often receive additional income through:
- Night shifts
- Weekend penalties
- Public holiday shifts
- Shift loadings
Many lenders assess these payments similarly to overtime by evaluating consistency and sustainability.
Where a history of regular earnings can be demonstrated, some lenders may include all or part of these income streams when assessing serviceability.
How Is Locum Income Assessed?
Locum income is one of the most misunderstood areas of medical lending.
Despite often being substantial, locum income can appear inconsistent from a lender’s perspective due to changing contracts, multiple employers and varying payment methods.
When assessing locum income, lenders typically look at:
- Income History
Many lenders require evidence of a consistent history of locum earnings, often ranging from 12 to 24 months depending on policy.
- Employment Structure
Lenders may assess income differently if you are:
- PAYG
- Self-employed
- Contracting through an ABN
- Operating via a company or trust
- Income Consistency
Lenders generally want confidence that income is likely to continue in the future. Consistent earnings and ongoing contracts may strengthen an application.
Why One Lender May Offer More Borrowing Power Than Another
One of the biggest misconceptions among medical professionals is that all banks calculate borrowing capacity the same way.
They don’t.
Two lenders reviewing the same applicant can produce very different results because each lender has its own approach to:
- Overtime
- On-call income
- Shift penalties
- Contractor earnings
- Locum income
- Private practice income
Industry guidance consistently shows that lender policy differences can have a material impact on borrowing outcomes for professionals earning variable income.
In some cases, the difference can be substantial enough to affect:
- Property selection
- Deposit requirements
- Investment opportunities
- Future lending flexibility
What Documents Do Lenders Usually Want?
Depending on your circumstances, lenders may request:
- PAYG Medical Professionals
- Payslips
- Employment contracts
- Group certificates or income statements
- Locum Doctors
- Tax returns
- BAS statements
- Bank statements
- Contract agreements
- AHPRA registration
- Practice Owners & Contractors
- Company financials
- Trust documentation
- Accountant letters
- Business tax returns
Requirements differ between lenders and application types.
The Bottom Line
Many medical professionals focus on interest rates when comparing lenders.
However, lender policy can often be just as important.
If overtime, allowances, on-call payments or locum income form part of your earnings, finding a lender that understands medical income structures may improve your borrowing position.
The goal isn’t simply to obtain a loan.
It’s to ensure your full financial position is understood from the start.
Talk to a Medical Lending Specialist
At Two Birds One Loan, we work with:
- Doctors
- Specialists
- Registrars
- Dentists
- Veterinarians
- Pharmacists
- Allied Health Professionals
We help medical professionals navigate complex income structures and identify lending solutions aligned with their circumstances and goals.
Talk to Two Birds One Loan today. Click here to book a meeting.
