A raise partway through the year can explain why a current salary and year-to-date earnings appear to disagree. Before requesting a corrected document, compare the period each figure describes and separate base pay from other earnings.
A salary change across two periods
This fictional example assumes a fixed salary paid monthly at month-end, with no payroll lag, unpaid leave or additional earnings.
The employee earns $6,000 per month from January through June. A raise takes effect July 1, increasing monthly base pay to $6,600. An employment verification completed in October reports that current monthly rate.
The September pay stub shows $55,800 in year-to-date base earnings through September 30:
- January through June: 6 months × $6,000 = $36,000.
- July through September: 3 months × $6,600 = $19,800.
- Total through September: $36,000 + $19,800 = $55,800.
Dividing $55,800 by nine months gives $6,200. The current rate is $6,600. Both figures fit this pay history because the first six months were paid at the lower rate. Replacing either document just to make the numbers match would obscure that explanation.
The arithmetic reconciles these fictional records. It does not determine the income a lender can use to qualify a borrower.
Check the dates behind the figures
An October verification can report current pay alongside earnings accumulated through an earlier date. On Form 1005, current gross base pay and year-to-date gross earnings have separate fields. The earnings section also separates base pay from overtime, commissions and bonus.
Compare the pay period covered, pay date and year-to-date through date with the raise's effective date. A document's issue date alone cannot tell you which rate applies to every dollar on it. Check the pay frequency too: twice-monthly and biweekly payroll use different numbers of pay periods.
If the file lacks support for the raise's effective date or amount, ask the employer or payroll source to confirm the missing detail through your approved verification process. Identify the two figures and the dates in the request so the reply can resolve the actual difference. A borrower's explanation may help locate the cause, but it should not be treated as employer verification of the new rate.
Keep the qualifying-income review separate
Fannie Mae's Base Income guide requires qualifying income to be consistent with year-to-date base earnings. A documented raise gives the reviewer something to reconcile; it does not remove that requirement.
This example concerns fixed salary and a raise already in effect. Variable hours, overtime and bonuses require their own analysis. The lender determines qualifying income under the applicable program and its requirements.
Keep the supporting employer or payroll evidence with the comparison. The next reviewer should be able to follow the old rate, new rate and effective date without reconstructing the explanation from messages.
