Salary is a fixed annual amount, paid out on a regular schedule (weekly, biweekly, semi-monthly or monthly) regardless of the exact hours worked in a given pay period. It doesn't move with sales results, output, or shift patterns — that's what separates it from hourly work, commission, and the other income types covered later in this course.
Because it's fixed and predictable, salary is the baseline every other income type in this course gets compared against. If you understand how a salaried file gets documented, every later module is really just explaining what changes when income stops being this simple.
Three things build a salaried file: a letter of employment on company letterhead confirming the borrower's position, start date, salary, and employment status (permanent, full-time, part-time); a recent pay stub showing the same salary and year-to-date figures consistent with it; and either a Notice of Assessment plus T4 for the prior year, or two years of T4s, depending on the file. Together these three cross-check each other — the letter states the ongoing rate, the pay stub proves it's currently being paid, and the government slip proves the history behind it.
Most Canadian employers use a probationary period of three to six months for a new hire, and this is one of the first places the tenure theme from the intro module shows up directly. The underwriting question is never really "has probation ended" — it's "how confident can we be this income continues," and a borrower moving into a similar, higher-paying role after eight years in the same field is a very different story from a first job in a new industry, even if both are technically on probation.
Because programs differ on exactly how they treat an active probationary period, don't assume either way — ask the specific lender or program early, before the client's conditional offer creates a deadline.
A straightforward raise is documented, not averaged — an updated employment letter and a pay stub reflecting the new rate are generally enough to use the new, higher figure going forward, unlike the averaging treatment bonus, overtime and commission income get in Module 03. The reasoning is simple: a base salary is a stated, ongoing commitment from the employer, not a variable result that needs a multi-year pattern to trust.
The errors that slow down an otherwise simple salaried file are almost always paperwork mismatches, not income problems: an employment letter dated months before submission, a job title on the letter that doesn't match the pay stub, a letter that isn't on letterhead or lacks a signature, or an employer letter for a business the borrower or a close relative actually owns — which tips the file into the family-business treatment covered in Module 07, not this one.
A borrower has worked in commercial insurance underwriting for nine years and just started a new, higher-paying salaried role at a different insurer in the same field six weeks ago, still on a standard three-month probation. The employment letter confirms permanent, full-time status. How should this file be approached?
The right approach treats probation as one input, not an automatic stop sign — nine years of directly relevant experience is real evidence the new role is likely to continue, which is different from a first job in an unfamiliar field. The tempting wrong answer is the blanket rule against any probationary income: it feels safe, but programs vary on this exact point, and treating every probation identically means either needlessly killing a strong file or missing that a specific program actually requires the wait. Using the previous employer's stale income is worse still — the borrower doesn't work there anymore, so it isn't income at all.
