Turn Bonuses, RSUs and Profit Share Into a Sustainable Gearing Engine

Using bonuses, RSUs and profit share to support a gearing plan only works if your core loans are affordable on base income alone. You treat variable pay as fuel for buffers, targeted debt reduction and lump‑sum investing – not as money you need to make the minimum repayments.

In practice, that means (1) structuring loans conservatively off your fixed income, (2) deciding in advance how each bonus or vesting event will be used, and (3) building buffers so a bad year doesn’t force you to sell assets.

Clarify how each component of your income behaves before building a gearing plan.

1. Principles: how upside income should interact with gearing

1.1 Anchor the plan to base income

For high‑income professionals, a practical internal ‘speed limit’ is to keep total home and investment repayments around 30–35% of net household income, even if banks offer more. That rule of thumb comes from multiple portfolio case studies and is echoed across our work on geared strategies.

Build your loans on what you reliably earn – salary, long‑term contracts, recurring business profit – and treat bonuses, RSUs and profit share as genuinely extra. If your spreadsheet only works when everything vests and the economy behaves, your gearing plan is too tight.

1.2 Buffers before growth

Across our geared client base, a robust target is 6–12 months of living costs plus all loan repayments in offset or cash buffers. That buffer materially reduces the risk that an income shock forces distressed property sales, especially with 2026–27 tax changes reducing negative gearing and CGT concessions.

Until you hit that buffer range, most variable income should go to cash/offset, not to new investments. Once the buffer is in place, you can allocate more of each bonus to accelerating wealth.

1.3 Work with the new tax rules, not against them

From 1 July 2027, negative gearing and CGT reforms mean:

1. Residential rental losses on many established properties will be quarantined.
2. The 50% CGT discount will be replaced with CPI indexation and a 30% minimum tax on many gains.

That makes after‑tax cashflow and moderate leverage more important than ever. Your bonus‑funded equity should support strong assets and conservative loan‑to‑value ratios (LVRs), not stretch you into marginal properties relying on tax offsets.

2. Bonuses, RSUs and profit share – what they really are for your plan

2.1 Cash bonuses: flexible but unreliable

Cash bonuses can be redirected immediately. The risk is behavioural – lifestyle creep – and structural – if you’ve geared assuming they’ll always be there.

For a geared strategy, treat bonuses as:

• Primary use: top up buffers and prepay non‑deductible home loan.
• Secondary use: deposits for quality assets once buffers are solid.
• Never: money required to meet basic mortgage or business loan repayments.

2.2 RSUs: equity with hidden risk

RSUs feel like guaranteed money, but they’re concentrated in your employer and tied to vesting and performance. For lending, some banks will shade or ignore RSUs, or only count a historic average.

For your gearing plan, think of RSUs as:

• Illiquid until vesting, with market risk.
• Lumpy capital events – similar to selling an asset.
• Taxable on vesting (as income), with CGT on later gains.

A default approach that works for many executives:

1. Sell most RSUs on vest.
2. Reserve enough cash for the tax bill.
3. Allocate net proceeds per your written rules (buffers, home loan, investment).

2.3 Profit share and distributions

For partners and business owners, profit share and discretionary distributions can swing wildly. Banks usually want 2+ years of financials and may average them.

For gearing, assume:

• Base drawings support core loans.
• Upside profit share behaves like a bonus – variable, not guaranteed.

That mindset protects you if your practice or business has a soft year, or if you later tap equity for business growth (see /insights/using-investment-property-equity-support-small-business-2).