Mortgage brokers in Norwest, helping the Hills District and Sydney
Free net to gross income calculator
See how lenders gross up rental income, tax-free payments and other income types for home loan assessments. Understand your true borrowing power.
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Updated November 2026
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Income gross-up
Last updated: November 2026
Some income types, such as rental income, Family Tax Benefit, and certain tax-free allowances, are treated differently by lenders when assessing a home loan application. Rather than taking these figures at face value, lenders may "gross up" the income to make it comparable to fully taxed PAYG income. This calculator helps you understand the grossed-up figure and how it feeds into your borrowing capacity.
Gross-up methods and accepted income types vary between lenders. For a borrowing estimate and lender options that suit your income type, use the form at the top of this page for a free strategy call.
Convert your net income to gross income for accurate loan applications. This calculator helps you determine your true borrowing capacity based on your take-home pay.
Before-tax equivalent
$20,000 a year is worth about
$29,412
a year before tax, at 2026-27 ATO resident rates.
Each lender sets its own gross-up rate. Lenders do not all use this tax method. Many apply a fixed factor, some take the income at face value and some do not count it at all. Lenders usually want Centrelink statements and may only count it while your children are young enough to keep it coming.
This is an estimate, not financial advice. Results are a guide only. Speak to a broker for accurate figures based on your situation.
Free, no obligation. Your numbers go with your enquiry.
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The calculator gives you a grossed-up figure. Sumit checks how each lender treats your rental, tax-free, business or self-employed income, and what that means for how much you can borrow. Free, no obligation. We generally respond within an hour.
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Quick answer
An income gross up calculator turns income you receive tax-free, or after tax, into the pre-tax figure a lender compares with a payslip salary. Multiply the income by the lender's gross-up factor: at an example factor of 1.25, $20,000 of Family Tax Benefit is assessed as $25,000. Each lender sets its own factor, and some use none.
The basics
When lenders assess your ability to repay a home loan, they work from gross income figures. PAYG salary is already gross, it's the pre-tax amount on your payslip. But some income types are received after tax, or are tax-exempt entirely. To compare them fairly against PAYG income, lenders apply a "gross-up factor", effectively inflating the net or tax-free amount to an equivalent pre-tax value.
For example: if you receive $20,000 per year in Family Tax Benefit (which is tax-free), a lender applying a 1.25x gross-up factor would treat that as $25,000 in gross income for the purposes of the serviceability calculation. This increases the income used in the assessment and, all else equal, increases your borrowing power compared to a lender who doesn't gross up.
The formula
The arithmetic is short. The judgement is in which income a lender accepts and what factor it uses.
Gross-up formula
Assessed income = Income received × Gross-up factor
Step 1
Separate income that is already gross (PAYG salary, business income from tax returns) from income that is tax-free or taxed differently (rent, Family Tax Benefit, allowances).
Step 2
Rent is usually counted at 70 to 80% of the gross rent first, to allow for vacancies, management fees and maintenance. Tax-free payments are usually taken in full.
Step 3
Multiply the tax-free or shaded figure by the factor the lender uses (1.25 is a common example). Add it to your gross salary for the total income used for servicing.
Example
You receive $20,000 a year in Family Tax Benefit. It is tax-free, so this example lender applies a 1.25 gross-up factor.
$20,000 × 1.25 = $25,000 assessed
That is $5,000 more income in the assessment than a lender who takes the payment at face value.
Our income gross up calculator above handles the net to gross step for you. Then run the result through the borrowing power calculator to see what it does to your loan size.
Worked examples
Three common income mixes, worked line by line, so you can see where the number comes from. These illustrate the arithmetic with example factors; they are not client figures or any one lender's policy.
A family receives $20,000 a year in Family Tax Benefit. It is tax-free, so the lender lifts it to a pre-tax equivalent.
A lender that does not gross up would use the full $20,000 as is: $5,000 less income in the assessment.
An investment property rents for $600 a week, $31,200 a year. The lender counts 80% of the rent first, then this example lender grosses it up.
A lender that stops at the shaded figure uses $24,960. The gap is why the choice of lender matters for investors.
A PAYG salary of $90,000 (already gross) plus $12,000 a year in Family Tax Benefit (tax-free).
Without a gross-up the same household shows $102,000. Only the tax-free part changes; the salary is already gross.
Income types
Not all lenders gross up the same income types, and the gross-up factors applied can vary. The most common income types that may receive gross-up treatment include:
Typically shaded first (to 70 to 80% to allow for vacancies and costs), then some lenders apply a 1.25x to 1.35x gross-up factor. The exact treatment varies widely and makes a significant difference for investors with multiple properties.
Tax-free government payments. Most lenders accept these as income and gross up by 1.25x. Some lenders require the payments to continue for at least 3 years to include them in servicing.
Accepted by many lenders when ongoing; typically grossed up by 1.25x as they are tax-exempt.
Certain ADF allowances are tax-free and may receive a gross-up when submitting a loan application.
Converted to AUD and potentially grossed up depending on the tax treaty between Australia and the source country.
Income types that are already gross figures, such as PAYG salary, ABN income from tax returns, and most business income, do not require grossing up, as the gross amount is already used in the assessment.
Rent from more than one property?
Each lender reads rent differently, and the gap grows with every property. Tell us what you earn and own, and we will show you how each lender counts it. See our investment loans for how we set up the next purchase.
Free. No obligation and no credit check.
Lender policies
The most common gross-up factor used by Australian lenders is 1.25x (25%), which approximates the gross equivalent of income taxed at the standard marginal rate for many borrowers. However, some lenders apply 1.35x for certain income types, and others do not gross up at all, they simply take the net figure.
The difference matters in practice. On $20,000 of Family Tax Benefit, the assessable income can range from $20,000 (no gross-up) to $27,000 (1.35x gross-up) depending on the lender. On higher rental income amounts, this variation can translate to tens of thousands of dollars in borrowing capacity difference between lenders.
| Income | No gross-up | 1.25x example | 1.35x example |
|---|---|---|---|
| $20,000 Family Tax Benefit | $20,000 | $25,000 | $27,000 |
| $24,960 rent (after 80% shading) | $24,960 | $31,200 | $33,696 |
| $12,000 Carer's Payment | $12,000 | $15,000 | $16,200 |
Illustrations of the arithmetic only. Factors are examples; each lender sets its own policy.
This is why borrowers with complex income structures, rental income, government payments, or tax-free allowances, often benefit most from using a broker. A broker can match you with the lender whose policy treats your income most favourably, rather than the first bank you walk into. Use our borrowing power calculator to see how your grossed-up income feeds into your overall capacity.
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Your application
How your income is documented and presented can affect how much you can borrow. Some practical tips:
We can review your income documentation and explain how different lenders would assess your application, then match you with those that offer the most favourable treatment for your income mix. Self-employed? Our guide to the self-employed home loan in Australia covers the documents, and specialist lending covers low doc, trust and company loans.
Sound familiar?
The arithmetic is simple. Which income a lender counts, and by how much, is not. Here is what usually gets in the way, and what we do about it.
5.0 from 360+ Google reviewsInvestors and complex incomes
Rental properties, several loans at once, income that does not fit a standard payslip. Word for word from Google.
5.0
From 360+ Google reviews
Cherrie Sandford
5 years ago on Google
Sumit is extremely professional, supportive and respectful in his business dealings. He went to great lengths to get several simultananeous home loans for me that were extremely complex in nature. He always returned my calls and emails in an efficient timely manner even though contacting me and my husband who works regionally was so difficult. As a woman doing business, he treated me so kindly and I never felt I asked him a silly question, though I'm sure I did. I always felt he would never ever let me down. I HIGHLY recommend Ry Ro loan centre and I would never do business elsewhere now that I've experienced his business services.
Param Singh
4 years ago on Google
Exceptional service, best with complex loan needs. Highly recommend for any loan service. Sumit is extremely supportive, very prompt and provides you the with the best solution for your finances and investments!! Highly recommended!!
Gagandeep Singh
4 years ago on Google
We can’t thanks enough to Mr Sumit Joshi and his team for the services they have provided, If we managed to have this investment property its just because of ryro loan centre, what a bunch of highly motivated professionals they are, Not only they managed to get the approval in such a short notice but also they managed to get me loan at the very lowest rates in the market, highly recommend thanks a lot
Z D
5 years ago on Google
Sumit has been assisting us with mortgage products for a few years now. His customer service, knowledge and problem-solving abilities continue to be outstanding. I can’t recommend Sumit and his team highly enough as an ethical and knowledgeable broker who is solution focused and thoroughly able to navigate complex circumstances with sensitivity to achieve sustainable results. Very responsive and would call back straightway with solutions and had the patience and time to explain things to us in simple terms. Sumit was able to achieve a great result through a really difficult time of multiple lockdowns. It was a great result and really appreciated. Thanks once again Sumit!
Based in the Hills? Our Norwest office works with investors, families on Family Tax Benefit and self-employed clients from Castle Hill to Kellyville, so you can meet a mortgage broker in the Hills District who knows how each lender grosses up income.
FAQ
What grossing up means, the formula, how lenders treat rental and tax-free income, and what the calculator covers.
9 answers in 3 topics
What to do next
Use your grossed-up income figure in our borrowing power calculator, or explore how lenders assess rental income and other complex income types.
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Sumit Joshi JP
Principal broker, Credit Rep 446824
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“Sumit is an outstanding mortgage broker. He patiently worked through our application and got us an awesome result when many other brokers wouldn't assist as we are small business owners. Thank you!”
Sumit Joshi JP, Credit Rep 446824. AFG Award Winner 2013 to 2019 and AFG Excellence Awards finalist 2022 to 2026. Calculator results are estimates. Each lender applies its own gross-up and income policy.
