What Car Lenders Verify When You Work

There is no one number. Every lender sets its own list. Most lender checklists name the kind of proof, not a count. Here is what lenders commonly ask for.

• A recent pay stub. Some lenders ask for your last two.
• A letter from your employer that confirms your position, start date and pay.
• A recent T4, T4A or T1 tax document with your Notice of Assessment.
• Bank statements that show your pay going in.

A practical answer: have your last two pay stubs and your latest T4 on hand. That covers most lenders’ lists, and a lender that wants more or less will say so.

How recent? Lenders ask for a recent one. Use your latest, and if your payroll portal lets you download the newest stub, grab that.

Pay stubs are one way to show your pay. Lenders commonly accept three others.

A letter from your employer. A good letter shows your income, your title or position and your work arrangement: whether you are full-time, part-time or on contract, and when you started.

A T4 or other tax document. A recent T4, T4A or T1 tax document with your Notice of Assessment is accepted as proof of employment by many lenders, sometimes as a second proof next to a pay stub.

Bank statements. They show your pay landing in your account. Have them ready if your lender asks; how many months a lender wants varies by lender.

Income you can prove carries weight with lenders. See how income looked across the car loans we funded.

It depends on the lender. Each lender decides how much of your extra pay it counts. None of the lender pages we read gives a formula for overtime, shift premiums, commission or bonuses. They list the documents.

A pay stub shows one pay period. If your hours or extras change from one period to the next, a single stub can look high or low. A T4 slip adds up the whole year. The Canada Revenue Agency counts salary, wages, commissions and bonuses as employment income, and it usually shows in box 14 of your T4.

Some lenders ask your employer about overtime and seasonal changes in your pay. If your extras are regular, a letter from your employer that sets out your usual hours and how your pay is made up can show the pattern.

Here is why it matters. One example buyer, one car, one payment.

Now add $700 a month of regular overtime that the lender also counts. The same payment is about 14% of $4,500, not 16% of $3,800. Lenders compare the payment with your income, so the pay a lender counts changes the picture. Lenders also look at more than one ratio, and every lender decides each file.

To try your own numbers, use the payment calculator. For how your score sets the rate, see car loan rates in Alberta, and for how pay and score work together, read good income, bad credit car loans.

Some do. A lender may run an employment and income check, and some contact your employer directly by phone or email instead of asking for a letter. What that looks like on a brand-new job is on our page about how lenders handle a new job or probation.

Lenders set their own rules on time on the job. One Canadian auto lender publishes a minimum of three months on the job, with exceptions when you take a new job in the same or a similar field after at least a year at your last one. Some lenders also ask your employer about probation.

Check your offer letter or contract for the length of any probation. Alberta’s Employment Standards use a different line: notice to end a job is not required if employment is 90 days or less.

If you are in your first months, read about starting a new job in Alberta to see how an offer letter, a first pay stub and probation fit into an application. Public sector jobs have their own probation rules: see public sector employee car loans.

If you invoice clients, drive for an app or run a business, lenders usually look at tax documents more than pay stubs. The usual ask is your T1 General and Notice of Assessment. Our pages on self-employed car financing and gig worker car financing cover what to bring. If write-offs keep your taxable income low, see what else can show your income.

If your work follows the seasons or a rotation, one pay stub may not show your usual pay. See seasonal worker car financing and oilfield worker car loans in Alberta for how to show the full picture. If you work in a school, car loans for teachers and educational assistants explains ten- and twelve-month pay and the summer. If you are paid flat rate or on commission, such as an auto technician or service advisor, see what lenders read when your pay moves with the work.

If part of your pay is garnished, your pay stub shows the smaller amount; see what to bring when part of your pay is garnished.

• Government photo ID, such as a valid Canadian driver’s licence.
• Your last two pay stubs, or a letter from your employer if you have no stubs yet.
• Your latest T4 or Notice of Assessment, if you have one.
• Bank statements, if a lender asks for them.
• A void cheque or a pre-authorized payment form.

Applying with a spouse? Each person brings the same papers. If your spouse is in a consumer proposal, see how that changes what a lender reads.

The quickest start is the online application. We review every application and call you back. Or call us at (825) 736-4438.