This may also be stated as "What are your salary requirements?" Great question! This is the start of what may become the salary negotiation, if they decide to offer you a job.
Do the research to be well-prepared to answer this question. Don't just pull a random number out of the air.
Providing a number that too high a number may make you look clueless or disqualify you. Providing a number which is too low will also make you look clueless or worthless.
From the employer's perspective, they naturally want to pay as little as possible. Smart employers also want to pay well in comparison with their competitors so they don't lose good employees to those competitors or other employers. But, not all employers are that smart.
These questions are the most dreaded by job candidates, with good reason. A "wrong" answer can result in a job offer with a salary that is too low or the end of the opportunity if you state a salary that is too high.
The "other" salary question is the current-salary question. To understand how to answer that question, read Interview Question: What Is Your Current Salary?
You need to evaluate the total compensation package offered by any employer. Salary is one part of total compensation, and, sometimes, other forms of compensation, like bonuses and stock or even extra vacation time and working form home, may make the total compensation acceptable even if the salary is not what you want.
Some employers, like colleges and the US federal government, publish at least part of their salary structure on their website: the salary grades, steps within each grade, and the salary range for each grade and step. Most jobs, except for very senior executive jobs, are assigned a specific salary grade, but the complete structure may not be shared, even with current employees.
A job posting may include the salary, salary grade, and/or range. Look for this information, but don't be surprised if you can't find it. Few employers provide it.
In addition to the salary structure, the other parts of total compensation give you possible points to negotiate to increase the value of doing this job for this employer.
Total compensation includes the paycheck plus the benefits like:
All of those are benefits (to you) but mostly expenses (for the employer). Prioritize these benefits for you. They can make a lower salary more acceptable, if necessary, or raise the compensation level above your expectations.
Prioritize the benefits to you. Would being able to work from home 2 or 3 days a week, more vacation, tuition reimbursement, training, a salary increase in 3 or 6 months, or a significant signing bonus be a good exchange for a higher starting salary? Which would be the most important? Which would be least?
The salary expectation question may be asked at different points in the hiring and interview process:
The application form may contain a field for "Salary Expectation." If possible, type in a word like "negotiable" or "appropriate" or some similar answer that is appropriate but is not a number.
Or, you may use a number from your research. If you decide to use a number, my recommendation is to choose a number from the higher end of your range rather than the lower end, but understand that being "expensive" may eliminate you from consideration, depending on the employer and their budget.
Hopefully, the number you provide (IF you provide a number) will just establish a baseline for the final negotiations later. If you receive a job offer, expect the offer to be lower than this number, in most cases.
If you don't provide a number, you are keeping your options open. Or, you may be eliminating yourself from consideration. The result depends on the employer (policies and culture) and how much competition you have for this particular job.
A good response is to try to postpone answering until you have a better idea what the job is like and if you want it. This should be acceptable, but the interviewer may not move forward until you provide a number.
Go on the offensive: Depending on the employer, this can be a very effective or a very risky approach, but it should provide you with very useful information.
To use this question as an opportunity to collect important information about the job -- like the salary grade and salary range for that grade, give this response:
Before I give you a number, I'd like to understand how you compensate employees and how this job fits into your compensation structure. I'm curious to know the salary grade for this position, the salary range and midpoint for that grade, and where that grade fits into your compensation system? That will give me a better idea of how this position fits into your structure and my career plans
That is not a typical response, and it uses terminology that seems to indicate you undersand the process. The answers to this question will provide you with very valuable information about how well-paid the job is (salary range, bottom to top, and the midpoint for the range), and where the job fits into their organization (the salary grade for this job and the other grades above and below it).
Understand that, typically, senior employees are paid above the midpoint of the salary range. When employees greatly exceed the midpoint of a salary range (which usually increases every year as the whole salary structure increases), they usually are promoted to a different job which is usually in the next higher pay grade.
Their answer to this question will give you a very good indication if the salary for this job is a good fit for you. It also shows you where this job ranks in their organization, and how much room for growth there is for you.
Use a more conventional response: You could go with a standard, more defensive response, and request postponing this discussion:
Before I give you a number, I'd like to understand more about company, the work environment, the requirements of the job, and other important considerations like the opportunity for growth. Then, I'll have a better idea what an appropriate salary would be.
The request for postponement may or may not be acceptable to the interviewer. Depending on your interest in the job, you may want to give a number, or choose one of the answers below.
Typically, this is better time to answer this question -- near the end of the interview, when you have had your questions answered and understand more about the job and the organization.
When they ask you the salary-expectation question, this is the time to ask about total compensation if information about benefits has not been shared:
I need to understand and evaluate the total compensation package before I give you a salary number. Could you share the standard benefits you provide?
Use your research to give you a number for your answer to this question:
Based on my research and the information you have provided, I believe that a salary in the range of $XX,XXX to $XX,XXX with 2 weeks of paid vacation and your other benefits would be appropriate.
Expect that when you offer a range, they will likely pick a number at the lower end -- if they do make you a job offer. So, choosing a number at the higher end of your target range may put you in the best position for future negotiations.
The job's location matters! If you are moving to a new state or into a large metropolitan area (or vice versa), understand that salaries change, sometimes dramatically, based on the location of the job.
Some parts of the USA are much more expensive (e.g. NYC or San Francisco) than others. Employers in the expensive areas must pay their employees more than employers in a less expensive location.
So, if you are paid $100k to do a job in NYC, expect that you will be paid less, possibly much less, for that job in a less expensive location. And if you are paid $50k for a job in a cheaper location, you could be paid more in another location, if the new location had a higher cost of living.
Hopefully, the employer you may be interviewing with includes the salary range in the job posting. Unfortunately, that practice is extremely rare (less than 10% of posted jobs have the associated salaries).
Rather than guessing at the appropriate salary, do research in advance so you understand what the probable salary range is for that job in that location. This research should be appropriate when you apply for the same job with different employers, unless you are able to determine what a specific employer pays for the job you want.
The sources and reliability of salary information are variable. Some websites offering salary information use salaries self-reported by individuals ("crowd-sourced"). Others may collect information from many employers.
Don't stop with one source of salary data. These sites are typically good sources of information. Use this information as part of your research, combined with the information collected from other sources:
The US Department of Labor provides useful information here: www.bls.gov. In addition, Indeed.com can give you an estimate of the salary for each job posted.
DO check multiple sources and average what you find, assuming you are making an apples-to-apples comparison. If you have colleagues or friends in this field, maybe even working for this employer, ask them generally the salary range you may expect.
DO understand that the numbers you find in your research may or may not include things like bonuses, commissions, benefits, tuition reimbursement, and all the other possible components of a total compensation package.
When you do name a number for an employer, base it on the data you found in your research. Offer a range that covers the middle to top salary you expect for the job, bearing in mind that if you receive an offer, the offer you receive will most likely be at the bottom of the range you provide.
Tell them that you are flexible, depending on the benefits provided, and the number ultimately acceptable to you depends on many things.
Your answer to this question lays the foundation for the salary negotiation process if they decide that you are their best candidate. When you start a new job, you have a “starting salary” -- what you are paid at the start of your tenure in that position. The right starting salary is very important.