How to Answer: “What Are Your Salary Expectations?” 

How many of you have played the game, Monopoly? If you have, you’ll certainly recall the ongoing cycle around the playing board filled with different properties you can buy or rent. You probably also recall that if you complete one full cycle around the board, you pass “Go” and receive instructions to gain $200 from the bank. You may also remember the dreaded “Go to Jail” card, which does not allow you to collect the $200 if you pass “Go” while headed directly to jail. 

What’s the point? A standard interview advice point is to “Never talk about compensation” or “Never be the first to talk about compensation.” However, if you are directly asked what your compensation expectations are, and you don’t give the requestor a straight answer, it’s like Monopoly. You won’t pass “Go” and you won’t get your $200! You’ve got to answer the question, so what’s the best way to answer it? 

As usual, Scripture gives us some foundation for how we should respond. Proverbs 24:26 says, “An honest answer is like a kiss of friendship.” James 5:12 further states, “…Just say a simple yes or no….”  While the context of this verse deals directly with taking oaths, I think the principle applies to where we’re going here. You’ll want to give an honest, straightforward answer, but without getting into too many details as indeed, more involved compensation conversations should only take place after you’ve gotten more information about the position being offered.  

Why Do Interviewers Ask About Compensation?

Before I share the best way to answer the question, let’s quickly hit the “why” interviewers ask this question. For most people the topic of compensation is uncomfortable to discuss, particularly with a stranger. I’ve had some people I’ve supported actually get irritated with the notion that this question WILL be asked. 

Even though it might make you uncomfortable, it has to be asked. For the organization to assure themselves that the product they’re looking to purchase (aka YOU) is in their price range, the interviewer shouldn’t go very far into the process without getting this question on the table. For a candidate to get very far down the road within the organizations I had HR responsibility for, this question HAD to be asked in the first or second discussion with a candidate. Now, the applicant’s answer didn’t have to be a specific number, but it needed to fit within the range that our organization felt was fair and equitable for the position (based on compensation surveys we participated in) for us to continue the discussions. 

How to Create a Range

So, with that backdrop in place, let’s go “live” with the question. You’re either on the phone for a screening interview with a recruiter, on a Zoom conference, or perhaps you’re in person with the hiring manager, and the inevitable question is breached, “What are your salary expectations?” I suggest you create a range for yourself based on five data points: 

1. W-2 information – Let’s start with the simplest number first. What did your W-2 say your income was last year? While last year may have been an abnormal year for you, let’s just start with the actual number. For the sake of this example, let’s say it was $80,000. 

2. Bottom-line – Based on your living style and committed expenses (mortgage, car loan, insurance, etc.), what is the bottom-line number you need to have to cover your expenses? For our example, let’s say it’s $50,000. 

3. Am I dreaming? – This is the number, that if you were offered it, you’d accept it on the spot. No thought process needed. It’s an over-the-top number beyond what you’d ever think you’d get. Let’s say that’s $100,000. 

4. Comfortable, but not satisfied? – This is the number that would appear to be a reasonable salary, but you’d sure like for it to be more. You can definitely make it work, but you’d really hoped it was higher. For our example, $85,000. Just a little more than you were making…. but you’d sure like more! 

5. Market reality – Based on your networking and gleaning from websites like salary.com and glassdoor.com, you believe the market level for this position, with your experience, is probably about $75,000. 

So, with these five numbers, and your judgment, you can now create a range that you’d find acceptable and reasonable. I’d suggest this range be about 20-25% in its spread. Remember, whatever range you share with the organization, you’ll need to be ok accepting an offer within that. 🙂 

For our example, when I put $80k, $50k, $100k, $85k, and $75k together, with a target range width of 20-25% and conservatively downplaying the outlying numbers, I arrive at $72-90,000 (25%). There’s nothing magic about creating the range, and it must feel comfortable for you to share it. You’ll need to use your judgment when weighing the five numbers to factor in your calculation.   

It’s not a set formula, but I’ve found that working with those five numbers enables most people to develop a compensation range with which they’ll feel comfortable. 

For more senior level executives, the base salary range components still hold to develop a range, and then I would just add “plus bonus and equity” if that’s applicable. If you are an executive that falls into that category, then you should develop an additional range to apply to your “total compensation” expectation, along with any stipulated components that you feel strongly about/know the market for. 

Be Honest About What You Will Accept

Avoid the temptation to quote a low end of your range that’s lower than you’re able or willing to accept in the hopes of staying in the process. The employer hears the entire range. If you give a low end of $68,000 when you know you need a minimum of $72,000, and an offer comes in at $70,000, you’re in a less than ideal position to negotiate for more at that point since the offer is within the range you quoted as acceptable. 

While it may feel disappointing to be told a position can’t pay what you’re looking for and so the interview process doesn’t go further… the reality is that a job is not the right one for you if it doesn’t pay what you need.  

The question “What are your salary expectations?” will be asked. Do a little homework and anticipate it as a way to weed out employers who may not be able or willing to pay what your value is in the market. Blessings! 

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Dave Sparkman currently serves as the volunteer Crossroads Career board chair and local ministry leader. He is also the founder and managing director of Spark Your Culture, a corporate culture consulting firm. Prior to that he worked at UnitedHealth Group, a Fortune #5 public company, serving in the role of Chief Culture Officer. His unemployment experience came from the implosion of Arthur Andersen, where he served as the West Region Managing Partner, People.