Director Pay vs Serviceability — Accounting & Lending for Company Directors

Pty Ltd company directors — typically founder-operators, often with a family discretionary trust holding the company shares — who have both a company tax decision and a personal lending decision in front of them at the same time. The decisions usually interact: how the director is paid affects the personal serviceability position; the timing of distributions affects the income shape the lender will read; the structure of business debt affects how a personal application is assessed.

The Property Investor Strategy page is portfolio-led — for clients building or restructuring a property portfolio. The Tax-Aware Mortgage Strategy page is loan-structure-led — for clients focused on debt recycling, loan-purpose discipline and offset positioning. This page is business-owner-led — for Pty Ltd directors whose primary lens is the running of the company and where the personal lending decisions are an output of that. Same underlying engagement model; different entry depending on what the client is most focused on.

Company financial statements and the company tax return (CTR), quarterly BAS, monthly Xero discipline (where retained), Single Touch Payroll, the year-end planning conversation, director-pay structuring (salary vs distributions vs franked dividends), Division 7A loan account discipline, base-rate-entity testing, and where applicable the family trust return that sits alongside the company.

Personal lending for the director — home loans, refinancing, investment property loans, equity release — plus commercial lending where it applies (owner-occupied premises, commercial investment, equipment finance). The lending scope is whatever sits in front of you. Information here is general; personal lending advice is given inside an engagement after your specific position is scoped.

It depends on the lender. Most major lenders take some combination of director salary, dividends and distributions as income for serviceability purposes — but how each component is treated varies. Some lenders apply add-backs for company tax already paid. Some treat retained earnings as available income. Some shade distribution income. The choice of director-pay structure can therefore materially change personal borrowing capacity, and the question is best worked through with both sides of the decision visible. General information only; personal advice inside an engagement.

How we are paid: Eternity Mortgage Solutions typically receives commissions from the lender for loans arranged on your behalf. A full explanation of how we are paid, our lender panel and any potential conflicts of interest is provided in our Credit Guide and Credit Proposal Disclosure document, available on request before any loan application is submitted.

No. Many business owners engage us for tax only and use a separate broker, or vice versa. Where both sides are engaged, the engagement is scoped in one written engagement letter that explains the tax-side and lending-side scope, fees and deliverables separately. The choice is yours and is confirmed in writing before any work begins.

No. Tax outcomes depend on the facts and on what actually happens between drawdown and 30 June each year. Lending outcomes depend on lender policy, verification, valuation and credit criteria. We model the alternatives, present the indicative numbers and explain the trade-offs. The realised outcome is determined by the facts and by the lender, not by the engagement.