If you have ever tried to get a loan, apply for government benefits, rent an apartment or open a new credit card—basically, if you have had to use the banking system in the last one hundred years—you have likely been asked to prove self employed income.

And the minute you say the words, “self employed,” you see the looks on everyone’s faces turn to a cringe.

This isn’t because they don’t respect your work as a business owner, but one of the many challenges of being a self employed or freelance worker is dealing with systems that are set up for a full-time employee, W2 workforce.

It is easy for banks to pull up employment records and tax returns for employees who earn the same amount, month after month, whose employers keep records on their behalf.

If you need to prove self employed income, the process becomes much more involved. Because your income likely varies radically over weeks, months, and years, and because you are more than likely your own record keeper, you will have to get a bit more creative with the documentation that you provide.

Not to worry, it’s not as difficult as banks and loan officers like to make it sound. And, if you have been freelancing for a long time, you are likely used to making adjustments and making your way of life fit into a process set up for someone else.

In this article, we will explore what people mean when they ask you for proof of income, why you should bother, and the different types of documentation that will help you navigate any situation where you do need to know how to prove self employed income.

Together, we will wipe that half-alarmed look off of your mortgage broker’s face, because you are so prepared!

 

What is proof of income?

“Proof of income” just means official verification in the form of documentation that you make the amount of money you say you do. Anyone who might be asking you for money for any type of payment on an ongoing basis will want to ensure you are able to make those payments.

It makes sense. If someone gives you a loan, or lets you rent their property, or something similar, is taking a risk on you. When you know how to prove self employed income, that risk is lessened in their eyes and everyone feels better and is more willing to open up their pocketbooks.

In my time as a freelancer, I have been asked for proof of income when applying for health insurance, before signing an apartment lease, at car dealerships, when setting up our utilities, on credit card applications and