Does bonus income count towards a UAE mortgage?
- Recurring bonus income counts if you show at least 2 consecutive years of bonus payments.
- Most banks use 75% of the average annual bonus divided by 12, added to monthly income.
- A 2-month bonus on AED 20,000 base adds about AED 2,500/month to qualifying income.
Yes, if it is recurring. UAE banks include annual bonus income in your DBR calculation if you can show at least 2 consecutive years of bonus payments. Most banks take 75% of the average annual bonus divided by 12 and add it to your monthly income. On a 2-month annual bonus at AED 20,000 base salary, that adds approximately AED 2,500/month to your qualifying income.
The CBUAE framework for variable income
The CBUAE Mortgage Regulations require banks to assess affordability based on "regular and stable income." Bonuses and commissions count toward this if they are recurring and verifiable. The bank's job is to satisfy itself that the variable pay will continue at broadly similar levels. Two years of documented payments is the standard evidence bar.
The regulations do not prescribe exactly what percentage of variable pay to include. That is left to each bank's credit policy, which is why treatment varies. Some banks apply a 50% haircut to bonus income; others use 75% or even the full amount for contractually guaranteed bonuses.
How the income uplift is calculated
The typical approach a UAE bank uses:
- Take the total bonus paid in Year 1 and Year 2 from your payslips.
- Average the 2 figures.
- Apply the bank's haircut (commonly 75%, meaning they use 75% of the average).
- Divide by 12 to get a monthly income uplift.
- Add to your basic salary for the DBR calculation.
Worked example
| Item | Amount |
|---|---|
| Base salary (monthly) | AED 20,000 |
| Annual bonus Year 1 | AED 30,000 |
| Annual bonus Year 2 | AED 36,000 |
| Average bonus (2 years) | AED 33,000 |
| Bank uses 75% of average | AED 24,750 |
| Monthly income uplift (AED 24,750 / 12) | AED 2,063/month |
| Effective income for DBR | AED 22,063/month |
At base salary only (AED 20,000), the 50% DBR cap gives AED 10,000/month for mortgage payments, supporting a loan of approximately AED 1,897,000 at 3.99%/25yr.
With the bonus income included (AED 22,063), the cap rises to AED 11,032/month, supporting a loan of approximately AED 2,092,000 at 3.99%/25yr.
That is an additional AED 195,000 in borrowing capacity from 2 years of documented bonus history.
The difference between banks that use 75% versus 50% of bonus income can amount to AED 80,000-150,000 in borrowing capacity on a typical bonus. It is worth asking each lender directly what their current policy is before you apply.
What documents you need
- Last 2 years of salary certificates or payslips showing the bonus payment amounts and dates
- 6 months of bank statements confirming the bonus credits to your account
- Employment letter confirming your current position and salary (some banks want it to mention the bonus scheme)
- For guaranteed bonuses: your employment contract or an addendum stating the bonus amount or formula
Types of variable pay: what usually counts
| Income type | Typically counted? | Conditions |
|---|---|---|
| Annual performance bonus (recurring) | Yes | 2+ years documented; bank uses 50-75% of average |
| Guaranteed annual bonus (contractual) | Yes | Usually at 100% if stated in employment contract |
| Sales commission (recurring) | Yes | 2+ years documented; bank applies haircut of 25-50% |
| Housing allowance | Usually yes | Must appear on salary certificate and be paid via salary account |
| Transport allowance | Usually yes | If regular and documented on salary certificate |
| One-off signing bonus | No | Not recurring; excluded from DBR calculation |
| Discretionary first-year bonus | No | Only 1 year of evidence; does not meet the recurring test |
| Project-specific allowances | Rarely | Treated as non-recurring unless clearly contractual |
End-of-service gratuity: does it count?
End-of-service gratuity (EOSG) under UAE Labour Law accrues over time but is only paid when you leave a job. Banks do not include EOSG in the income used for DBR, because it is not a regular monthly inflow. Some banks accept EOSG savings as a source of funds for the down payment, but it does not increase your maximum loan size.
Self-employed and freelance bonus income
Self-employed applicants have a different income assessment process. See the self-employed mortgage UAE guide for how banks assess variable business income. Commission earners in salaried roles follow the framework above; self-employed commission income is treated differently.
How this interacts with the DBR cap
Remember that all your monthly debt obligations (car loan, personal loan, credit card minimums at 5% of limit) are counted in the DBR alongside the mortgage payment. Including bonus income increases the ceiling, but existing debts still erode headroom from both sides. For the full picture on how DBR works, read the UAE DBR guide.
Frequently asked questions
Does annual bonus count towards income for a UAE mortgage?
Yes, if recurring. Show at least 2 consecutive years of payslips and bank statements proving the bonus was paid. Most banks use 75% of the average annual bonus divided by 12 as a monthly income uplift in the DBR calculation. A contractually guaranteed bonus is typically counted at 100%.
How many years of bonus do I need for a UAE mortgage?
Most UAE banks require at least 2 years of documented bonus payments. Some accept 1 year if the bonus is stated as guaranteed in your employment contract. Start preparing your documents early: 2 years of payslips showing the bonus amounts, and 6 months of bank statements showing the credits.
Does housing allowance count as income for a UAE mortgage?
Usually yes. If your housing allowance is paid directly into your salary account and appears on your salary certificate, most UAE banks include it in gross income for DBR purposes. Ask your chosen bank to confirm before you apply, as policies differ slightly.
Can I use my end-of-service gratuity as income for a UAE mortgage?
No. Gratuity is not regular monthly income and UAE banks do not include it in the DBR calculation. You can use saved gratuity funds toward the down payment, but it will not increase the maximum loan size.
Which bank is most generous with bonus income in UAE?
Bank policies are not publicly stated and can change. In practice, lenders with more flexible income assessment include ADCB, Emirates NBD, and Mashreq. A mortgage broker with access to multiple lenders can run your figures across several banks simultaneously to find the most favourable treatment. See the UAE mortgage broker guide for when using a broker makes sense.
See how your full income affects affordability
Use the eligibility tool to enter your base salary and variable pay together, or compare rates side by side.