Mortgage brokers assisting their clients with various financial aspects should have an in-depth understanding of annualised salaries in order to successfully assist their clients with any questions or concerns that may arise. Yes, annualised salary does include superannuation. Annualised salary refers to the amount of money an individual makes over the span of a 12-month period if their pay rate has not been changed.
Superannuation refers to funds that have been set aside by an individual’s employer while they are employed and can be accessed when the individual reaches retirement age. The employer will set aside a percentage of their employee’s earnings into a separate superannuation account.
In Australia, mortgage brokers often annualise their client’s salaries to gain an understanding of their financial statuses and verify their ability to make the required mortgage repayments. Annualising a salary is also a great way for some individuals to create a yearly budget.
Mortgage brokers can assist their clients with annualising their salary by using an online Income Annualisation Calculator, where they will input the gross income shown on the client’s last group certificate, the end date shown on their most recent payslip, the date the client started their job, and the YTD gross income shown on their most recent payslip.
A client’s salary can also be annualised by using the following equation: Divide earned income by the number of months worked to calculate monthly income. Then, multiply monthly income by 12 to calculate the annualised salary.