Back to glossary

Net Income

Net income is what is commonly referred to as “take home” pay or “disposable income”. If you are in employment, your annual salary could be £25,000, but this is your “gross income”. This is before any deductions are removed from your pay packet.

Each month, you will earn a certain amount of money. This is what’s called your gross income. Net income is what you’re left with after the regular monthly deductions. This includes the income tax you pay, national insurance contributions, etc. If you are not self-employed, this will include anything that is deducted straight from your income.

If we use an example of an annual salary of £21,000. Each month, your gross income would amount to around £1,750.  Your net income would amount to roughly £1450 per month in the UK after deductions.

Your net income can vary though depending on a number of factors such as if you are paying into a pension, paying for a student loan or child maintenance.

Proving Your Income

As part of your car finance application, you will have to be able to prove your monthly income. This will allow the lender to confirm how much money you are bringing in each month, so they can be confident you will be able to pay it back. Proof of income can be your most recent payslip, a copy of bank statements, any commission or bonus payment documentation, etc. The more proof you have available, the better chance you have of having your car finance application accepted.

Net Income and Car Finance

When you’re applying for finance, it’s important to keep both net income and gross income in your mind, as your net income is much more important.  It will help indicate how much credit you can afford. We conduct affordability checks on all our customers to ensure the monthly payments can be met comfortably and won’t put you into any unnecessary financial struggles.

Want To Be Sure?

Our simple, obligation free online process can give you a better idea of your eligibility!