# How does variable income — bonuses, commissions, overtime — affect my mortgage qualification?

> Lenders typically use a 2-year average of variable income components (bonuses, commissions, overtime) from your T4s and NOAs. The key is demonstrating consistency — a one-time bonus doesn't help much, but 2 years of regular commissions usually qualifies at 80-100% of the average.

Category: Qualification
Last verified: 2026-04-19
Source: https://ratellow.com/faqs/qualification/how-does-variable-income-bonuses-commissions-affect-mortgage-qualification

## Answer
**Variable income can count toward your qualification, but lenders apply a stability test before including it — the less predictable the income, the more documentation you need.**

## How Lenders Treat Each Type

### Commissions (sales roles)
- **A-lenders**: Use 2-year average of gross commissions from T4s. If you've been in the role less than 2 years, approval is challenging at A-lenders.
- **Gross vs net**: Lenders use the T4 gross amount, not net after business expenses.
- **Declining commissions**: If year 2 is lower than year 1, some lenders use only the lower year.

### Bonuses
- **2-year average**: Used if the bonus is recurring and documented on T4s for both years.
- **One-time bonus**: Typically excluded entirely.
- **Guaranteed bonus**: If an employment letter confirms a guaranteed annual bonus amount, it may be included at 100%.

### Overtime
- Same 2-year T4 average rule. If overtime is mandatory and documented as part of the role (e.g., union contract), it's more likely to be included in full.

### Part-Time Employment
- Included in full if you've held the part-time role for 2+ years alongside primary employment.

## Tips to Strengthen Your Application

- **Provide a 3-year average** if years 1-2 show increasing income — it tells a better story.
- **Employment letter**: Ask your employer to confirm the variable income is recurring and expected to continue.
- **Pay stubs**: 90 days of pay stubs showing recurring variable component strengthen the case.

### Your Next Steps
1. **Gather your last 2 years of T4s and NOAs** before applying
2. **Request an employment letter** confirming your expected variable income
3. **Speak with a mortgage advisor** to determine which lenders are most favorable for your income profile

## Related guide
- https://ratellow.com/guides/gds-tds-qualifying-ratios

## Sources
- OSFI B-20: Income Verification Standards — https://www.osfi-bsif.gc.ca/en/guidance/guidance-library/residential-mortgage-underwriting-practices-procedures-guideline-2017#1.0
- How to Qualify for a Mortgage — FCAC — https://www.canada.ca/en/financial-consumer-agency/services/mortgages/mortgage-qualifier.html