You must have one of the following to accurately calculate base pay. You cannot use the IRD summary alone

• Payslip clearly stating annual base salary

• Employer Letter/Contract confirming base salary or hourly rate and minimum hours per week.
  The employer letter cannot state average hours, it must be ‘minimum’

• 3x payslips that show the exact same amount of income every pay cycle - annualise this figure

• Payslips regularly showing ‘ordinary hours’ or similar wording. For example, if the payslip shows ‘Ordinary hours - 40 x $26ph’ and then all other payments are on top of things like bonuses, overtime, meal allowances etc, then we can take 40 x 26 = $1,040 per week or $54,080PA as the base pay

For this you will need

• 6 Month IRD summary (Note, they will NOT accept using half a 12 month or 6 of the 12 months added up. It must be a 6 month summary)

• Base salary already calculated
  
  This also requires that the client has spent 6 months with the same employer on their IRD.

  If 6 months are not completed, we can only use base salary.

  How to calculate

1. Take the base salary. For our example, we will use $80,000 gross per year. Divide by 2 to give us $40,000 for our example.

2. We take our figure from the IRD summary. In our example, let’s use $47,856.
   
   Important Note: This is not the figure on the first page of the summary. It is the figure under ‘salaries and wages’ for that employer.
   

3. The calculation is -

   (figure from IRD summary - halved base salary) x 2 = annual overtime

   For our example - ($47,856 - 40,000) x 2 = $7,856 x 2 = $15,712 gross annual overtime.

Requirements

• Client has worked the role for 2 years

When the client is not on a permanent contract, we must use the average of the last 2 years income, according to their IRD summary to determine their income.

This doesnt have to be tax years, it can be 2 years from todays date.

It is not scaled further and is used at 100% in the calculator.

You will need

• Last 2 years financials

• IR4 if in a company

• IR3, IR7, or IR10 if in personal/trust names

Before beginning, take note of the owners as per companies office/annual report. If the client is only one of two owners with equal holdings, then only take 50% of any numbers calculated below.

Go to the BNZ calculator and go to the ‘self employed’ tab.

Simply fill in the boxes for the last 2 years as in the financials.

Include all business loans in servicing and provide 3 months statements for each.

Addbacks

Acceptable addbacks

• Anything that is in the BNZ ‘self employed’ calculator

Note: If an application has more than 1 business eg: Pizza business and an Uber business, add the figures from each together and add into 1 calculator, but note the split between the businesses in your diary notes.