How to Address Salary Requirements in a Cover Letter
Salary requirements are usually included in cover letters as a result of an employer job request or advertisement. The salary requirement is part of assessment of your application. It is more than a formality, and you should seriously consider your salary needs before responding. Bear in mind that when you provide a salary requirement, you are effectively committing to a position for future negotiations. To provide a figure which is both reasonable and equitable, as well as allowing you some room to maneuver, you need to assess:
- Market rates in your salary bandwidth: These are benchmarks for salaries in your professional role. You can check your baseline salary against job ads, previous jobs, and employment industry information in your sector.
- Experience and expertise: Highly qualified and experienced individuals receive higher pay. You can research salaries at your level through the same methods as market rates, but be sure that you're checking appropriate examples of salaries.
- Allowances payable in some trades and professions: In some professions licensing and specific allowances are part of a salary package. These packages can vary considerably, but these allowances are usually standardized. They should be described in your salary requirement as a separate payment, with a total given as the salary requirements.
- Costs and out of pocket expenses where applicable: These costs may or may not be redeemable from the employer in some jobs. In commission based jobs and other forms of work the employee is an agent, rather than an employee and the costs can represent an overhead which has to be considered in determining your salary requirement.
Writing the letter
Your salary requirements should be kept simple. Don't provide complex information or anything which can be misinterpreted. A few lines will cover the subject adequately. This is a business letter, and has to be well laid out to make information easily findable and readable. It's advisable to use paragraph headings to cover specific aspects of the materials requested by the employer. The salary requirements should be kept to a separate paragraph of the cover letter, headed accordingly.
- Salary requirements (basic): My basic salary requirements are based on current industry standard rates for professional staff with a Masters Degree and 5-10 years experience: $75,000- $90,000. Please be advised that this salary is quoted without inclusion of the value of any package elements, and is therefore negotiable.
In contract jobs, the requirements can be complex and require careful assessment of real costs. Salary requirements in jobs which include allowances or other considerations need to be well laid out. The priority is to clearly detail all salary requirements so that the reader can understand the assessment.
- My salary requirements are based on industry rates and allowances as follows: Salary: $120,000 (Doctorate level with 10 years experience and consultancy managerial role) Allowance A: $10,000 per annum, Allowance B: $2000 per annum, Traveling expenses: As required by contractual obligations. Total: $132,000 plus expenses.
In all cover letters, you should also make a comment about your flexibility. You can something like: Please note these figures represent basic figures without reference to final contract arrangements. I am happy to negotiate regarding the salary package.