What is the best strategy when a recruiter asks you your current salary before making an offer?

This seems to be an anchoring move. Given that the company has and is willing to at least match your existing pay and you as the potential employee want to get the most money you can, what is the optimal strategy?

Always tell the truth….but then add your total compensation expectations.

If you are joining an excellent company, they will offer you compensation that is in line with the impact they expect you to have regardless of what you’ve earned elsewhere. If you have a great recruiter, they will work to advocate for you in getting the right package that optimizes for your preferences but also meets the principles and constraints of the company’s compensation system.

You may assume that a recruiter is just looking to match the minimum needed to get you in the door. While that might happen at sub-par companies, that should not happen at companies with fair, principled compensation. Under a principled compensation system, the recruiter is often just trying to make sure that the offer is going to be in the “ballpark” of your expectations before investing more time in the offer approval process. Great recruiters should be asking you about compensation very early in the process so if they are asking right before the offer, that is pretty late in the game.

If you are concerned that your current salary is low and would signal that your interview performance was stronger than your “market value”, then it’s perfectly reasonable to follow-up with some information on why you feel your current salary is low. Hypothetically, let’s say you believe your total annual compensation should be $120K but your current salary is $80K. Some valid reasons could sound like:
My current salary is $80K but I took a lower salary because the company was at an early stage and so I sacrificed for a fair bit of equity. Overall my hope is that in my next position, I’d be earning $100K with another $20K in bonus/equity value.

My current salary is $80K but honestly I didn’t know much about the market and the demand for <insert your profession> skills when I started at xyz company. Based on what I’ve researched, I believe $120K in total compensation is appropriate and I’m very open to $100K of that in salary with the remaining in equity.

Most importantly, you should never, ever lie about your salary or any factual information about your background. Companies absolutely will rescind offers when they find that you’ve lied and they should. If you were willing to lie about an important piece of information, how can they trust that you won’t lie once you are an employee?

I’ve been both the candidate and the recruiter and have found again and again that transparency and a “work together” approach leads to better outcomes. Don’t forget you’ll also likely see the person at work day to day so building trust early and having a positive negotiation experience should also pay off long after you’ve received your first paycheck. –http://fortune.com/tag/cap-quora/