Birefringence control is essential in the fabrication of on-chip magnetooptic Faraday isolators. We report on film thickness and stress studies of birefringence in sputter-deposited single-layer bismuth-substituted iron garnet films and double-layer iron garnet films with gadolinium gallium garnet (GGG) covers. We examine compressively and tensilely strained films and analyze the photoelastic response of the sputter-deposited garnet films. We show that the net birefringence can be ed out under planar compressive strain conditions. Bilayer GGG on iron garnet film yields a reduced birefringence. Temperature control during the sputter deposition of the GGG cover is critical and strongly influences the magnetic moment and birefringence level in the waveguide. High-temperature deposition lowers the magnetization in the underlying iron garnet film.