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A letter of employment is a document from a borrower’s employer confirming job title, employment status, length of service, and income, used by Canadian lenders to verify that a stated salary or wage is accurate and ongoing.
Lenders typically want the letter on company letterhead, signed by a manager or HR representative, and dated recently — usually within 30 days of the application. It should state whether the position is permanent, probationary, or contract, since probationary and contract employment often require extra conditions before an offer becomes a firm commitment letter.
The letter is normally paired with recent pay stubs and, for salaried and hourly employees, a Notice of Assessment to confirm what was actually reported to the CRA matches what the employer states. Self-employed borrowers use different documentation — typically NOAs and financial statements — because there is no employer to issue this letter.
Probation and contract roles: lenders often ask for extra conditions, such as confirmation of a permanent offer, before relying on income from a probationary or fixed-term contract position.
Used to confirm qualifying income: the letter supports the income figure used to calculate debt service ratios, not a replacement for pay stubs or the NOA.
Broker’s role: mortgage agents, submortgage brokers, mortgage associates, and courtiers hypothécaires across Canada routinely request and review this letter before submitting a file to a lender.
New-to-Canada files: for recent immigrants without a long Canadian employment history, the letter is often reviewed alongside programs designed for newcomer borrowers.
Definitions reflect Canadian federal and provincial rules as of the “Updated” date above. Not advice for any specific file.
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