Salary declaration on new card application 2 June at 12:18AM in Credit Cards 14 replies 852 views

Bemr

I'd like to apply for a new BT card soon.  I'm not sure what income figure to declare on the application though.

I earn a decent salary but make a large pension contribution each month via employer salary sacrifice, and also contribute to an employer share scheme (not sharesave), which means my take home pay is about 30% of what would ordinarily be expected.

When the share scheme pays out every few months, the difference between offer & vest price is taxed through my PAYE payslip, which means in those vest months may take home pay is even lower.  However the way the share gains are reported on my payslip makes my gross pay seem a lot higher for the year, plus I get a good annual bonus and occasional overtime, all of which pushes my gross salary up to ~170% of base.

Can anyone here advise what income figures I should report on the application?  I want to maximise my chances of getting accepted for the card but don't want to create trouble for myself by giving the impression that I'm exaggerating or using fabricated figures.  If I go with the higher gross figure I'm worried the disparity with take home pay (if they ask for that) would look quite suspicious.  Although I have the payslips and P60 to back up the numbers I'm a bit nervous about creating even a suspicion of fraud.

Mickey666

What salary does your employment contract state?  I’d use that.  How you spend that salary (which is all a salary sacrifice is) is up to you.  If the CC company needs proof of salary you can use your employment contract as proof.

gjpowen

I only have one income from one employer - when applying for any credit I always list my total compensation package which includes salary, pension contributions I make, pension contributions my employer makes, bonus and other benefits I am provided with.  I could if I chose to for example reduce my pension contributions and take a higher salary, or convert the benefits to salary which is why I include everything provided by my employer as my income. 

 A couple of times when applying for new products I have been asked for proof of income and have submitted payslips which could suggest a lower income than I have stated (as they don’t include my annual bonus for example depending on the dates of payslips they ask for), but this has never been questioned or challenged.
I've never been asked for proof when applying for a credit card however - just when applying for bank accounts e.g. HSBC Premier/Barclays Premier etc.

Fighter1986

Some application forms ask for monthly take home pay, others ask for salary.

Salary is the gross annual figure detailed on your contract of employment, monthly take home pay is of course exactly that.

Just input exactly what you're asked to input. 

surreysaver

Fighter1986 said:

Some application forms ask for monthly take home pay, others ask for salary.

Salary is the gross annual figure detailed on your contract of employment, monthly take home pay is of course exactly that.

Just input exactly what you're asked to input. 

Even take home pay could be open to interpretation.  I have things come out of my salary before it goes in my bank - Share Incentive, AVCs etc.  What is the difference between them coming out of my pay before it goes in the bank, and me receiving it into my bank then paying it straight into a pension or ISA?  If they're voluntary payments that you can stop at any time, then I would include them as take home pay.

Bemr

Thanks for the advice.

My employment contract is very old so doesn't contain anything meaningful regards salary.  I just get a piece of paper each March that details last year's annual bonus & salary, and the coming year's salary increase and shares allocation.  Next year's bonus isn't guaranteed and shares value is obviously not fixed, so should I ignore those?

But maybe I am over thinking this.  What is the worst that can happen if the card issuer thinks there's inconsistency in the figures - declined application or some sort of fraud marker? - hope that isn't too much of a loaded question.

Bemr

gjpowen said:

I've never been asked for proof when applying for a credit card however - just when applying for bank accounts e.g. HSBC Premier/Barclays Premier etc.

Forgot to say, I got asked for proof once a few years ago when applying for a Tesco credit card.  They asked for both gross and take home pay on the application, and because there was a small disparity (I was making slightly increased pension contributions at the time, but nowhere near the % I'm doing now), I subsequently had to explain the difference over the phone and post payslips as proof.  It worked out okay that time but felt like I was pushing my luck.

ARH_2

How about your P60 end of year statement? You should have received one recently as the deadline was 31-May.

This is a fair reflection of what you earned least year, and seems like a sensible thing to put down in the gross income box. It'll include the bonus and overtime you mention, and  - I'd expect - your salary before the sharesave complexities. It's probably one of the bigger numbers you could use, so maximises you acceptance chance. If asked for proof, you could then produce the P60.   

pjread

I generally just put base salary if it asks for salary; trying to explain anything too complicated rarely fits well with data processing.

Bemr

ARH_2 said:

How about your P60 end of year statement? You should have received one recently as the deadline was 31-May.

 I was thinking along the same lines, I do have a recent one and it's somewhere between base salary and total gross so seems a reasonable compromise.  It does include the share scheme numbers (there's no way around that, they get reported on the payslip just like normal pay), but not the salary sacrifice pension contributions, so they kind of even each other out.

pjread said:

I generally just put base salary if it asks for salary; trying to explain anything too complicated rarely fits well with data processing.

The trouble with me just putting base is that it may still complicate things due to the mismatch with take home pay after pension contributions.  If I'll have to explain complexities anyway I'm thinking I might as well use the higher figure.

dahj

surreysaver said:

Fighter1986 said:

Some application forms ask for monthly take home pay, others ask for salary.

Salary is the gross annual figure detailed on your contract of employment, monthly take home pay is of course exactly that.

Just input exactly what you're asked to input. 

Even take home pay could be open to interpretation.  I have things come out of my salary before it goes in my bank - Share Incentive, AVCs etc.  What is the difference between them coming out of my pay before it goes in the bank, and me receiving it into my bank then paying it straight into a pension or ISA?  If they're voluntary payments that you can stop at any time, then I would include them as take home pay.

Your take home pay is what get after deductions, the fact that you buy extra assets in the form of shares/pension doesn't change that. They want to know your disposable income not your possible disposable income.