The Best Way to Negotiate Your Salary

Negotiating your salary is absolutely necessary whether you’re up for promotion or you got a new job offer. And, understanding the why and how of salary negotiation will give you the confidence you need to do it well. You have so much to gain!

You might think that negotiating for, say, $1,000 more per year doesn’t add up to that much. Well, then, you’re not thinking long-term. Basic math will show that $1,000 adds up to $30,000 over a 30-year career. But, the reality is that most individuals stand to lose $500,000 by age 60 if they don’t negotiate their salary upon entering the job market.i That’s a lot of money!

This makes sense when you consider that your future raises depend upon your current salary. The more money you make now, the more you can negotiate for in the future. In addition, benefits are often tied to salary, so we’re not just talking baseline pay here. The impact on your retirement can be huge.

And, then there’s the pay gap when it comes to gender and race. White women make 80% of what white men make in America, while African American and Latina women only make 54-63%.ii What’s more, the rate at which the gap is closing is slowing down after many years of progress. The AAUW estimates that the gap will not close until 2119 based on current trends.iii Salary negotiation is the most effective action you can take to combat this trend.

Regardless of who you are, respectfully negotiating your salary shows your new employer that you know how good you are at your job and how much your work is worth. No one will value you if you don’t value yourself.

So, here are the best guidelines to follow when negotiating your salary:

1. Do not reveal your current or previous salary if you can help it.

As explained in our “5 Things to Never Reveal When Job Hunting,” you should always avoid giving specific figures about previous pay. This can lower your bargaining power or, worse, set you up for unfair pay.

On a job application, avoid entering information about your salary. If the field is required, put “N/A” or dashes. If it’s not required, leave it blank.

When asked about your previous or current salary in an interview, do your best to delay talking about it and keep your information vague. For more specifics on how to do this, use the strategies mentioned in guideline #2.

If all else fails, it’s better to give your target salary than your current or previous salary. But if you’ve got no choice, then give your total compensation (for example, salary plus bonuses and stock options).

2. Try to avoid discussing salary until you are offered the job.

Yes, I know, you really want to know how much you’ll get paid. But asking about this up front puts you at two disadvantages: 1. It sends the message that you care more about your paycheck than your fit for the job. 2. You throw yourself into negotiations before you have any bargaining power. Once you get an offer, you have leverage.

If an employer asks about your previous pay or salary expectations, say that you would like to learn more about the position before discussing salary, and then demonstrate this by asking a specific question about the job. If the employer returns to the topic, then flip things around and ask if they can share their hiring budget for the position first.

3. Know your target salary before you apply for a job.

This is key. Never go to an interview let alone negotiate an offer without determining your target salary first. Your target salary is the range of pay you need and want to make. Shoot higher than where you’re at right now.

To find your target salary, consider your current cost of living as well as your spending habits and future lifestyle goals. You might use an online cost of living calculator. Then, research salaries for your job title, qualifications, experience, and location.

4. Emphasize your strengths, abilities, and achievements.

Always do your best to show your employer why you deserve that for which you are asking. Come with a plan of what you will say that starts off with a punchy summary of your value in terms of unique skills and past accomplishments.

To make a counter-offer, communicate that you understand where you’re employer is coming from but that you want to make sure that factors x, y, and/or z are being considered. These factors must demonstrate your value. You might highlight your recent performance numbers, for instance, or that major conflict you resolved that ended in a contract agreement.

5. Ask for the right amount in confidence but be reasonable.

Your request for more money will be taken better if you’re respectful and listen to what your employer has to say. This does not mean that you should cave in to whatever they offer right away. It does mean that you should sense boundaries and limitations.

If they’re offering $55,000, a request for $85,000 is likely to be met with laughs or anger. Generally speaking, you can ask for 5-10% more than what is offered, although this varies from field to field.

Your employer may tell you straight up that they have a maximum budget for your position. If this is the case and they seem to be telling the truth, you should probably take their word for it. Coming in at the top of their budget means you have succeeded. Plus, you can always ask to revisit the conversation in 6 months or a year.

Finally, just because a salary is agreed upon, that doesn’t mean negotiations are over! You can now move on to discussing health/retirement benefits, vacation/sick time, family leave, etc. Maybe the department budget can’t accommodate your desired salary but your boss can arrange for you to work at home on Fridays or purchase you a new computer. Now is the time to ask.