This module is about T4 employees on a fixed-term contract or working through a staffing agency — still receiving a T4 and standard payroll deductions, but with an employment end date rather than an open-ended role. A borrower operating as an incorporated contractor, invoicing a client through their own personal corporation, is a different file entirely and belongs to Course 03, Self-Employed & Incorporated Borrowers.
A contract employee's current pay is usually easy to document; the harder question is whether the income continues past the contract's end date. A one-year contract ending three months after closing is a materially different file from an open-ended contract, or a fixed-term role in an industry where renewal is close to automatic.
The employment or contract agreement itself, showing the term dates and rate; a history of prior renewals with the same employer, if one exists, since a pattern of repeated renewals is strong evidence the relationship will continue; and, where available, a letter from the employer speaking to the likelihood of renewal or extension.
Some fields — education, healthcare locums, seasonal trades, project-based professional services — routinely have short gaps between one contract ending and the next beginning, and a lender familiar with the field will read a normal, brief gap differently from an unexplained six-month absence. Context matters here more than a rigid gap-length rule.
A borrower on their first contract, with no renewal history at this employer, is the weakest version of this file — it's the tenure problem from the intro module again, applied to contract work specifically. A longer employment history in the same field, even across different employers, helps offset a short track record with the current one.
A borrower is a locum physiotherapist on a 12-month hospital contract, with two prior consecutive contracts at the same hospital going back three years. The current contract ends four months after the closing date. How should this be treated?
A consistent renewal history is exactly the kind of evidence that answers the real question — will this income continue — even though the current contract, read in isolation, has an end date. Treating every contract-end date as an automatic red flag ignores the pattern sitting right there in the file. Calling it identical to a brand-new contract with no history is the mirror-image mistake: it throws away three years of real, relevant evidence.
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