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Tech Career Insights: Why companies ask for payslips and ways to respond
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Why companies ask for payslips and ways to respond

26 March 2024, by Anne Gonschorek

Note: This article has been adjusted. The first version that didn’t live up to our quality standard & didn’t do our community, nor OfferZen’s stance on the topic justice. Thanks to the members of the community who flagged this with us and helped us improve it.

During the interviewing process, some companies will request a current or previous payslip from their applicants. This practice often creates tension between employers and job seekers.

The practice is slowly dying out but it’s still quite prevalent in South Africa, so it’s worth understanding. Here’s what this practice is about and how to navigate it.

The answer to this question depends on the region:

  • In South Africa, there’s no law keeping companies from asking prospective new employees for proof of their previous salary before making an offer.
  • In the US, it depends on the state the company is in.
  • In the EU, a new Pay Transparency Directive 2024 suggests that it might in future be non-compliant to ask future employees for payslips.

What companies say about requesting payslips

HR employees usually know that job seekers don’t particularly like being asked for payslips during the interviewing process. They usually name some of the following reasons for doing so anyway:

  • Verifying employment
  • Market research for salary benchmarking and benefits
  • Understanding a candidate’s compensation structure end to end to be able to put in a competitive offer
  • Company policy about the % increase they can give

The last reason is of course the main point of contention. Companies feel that the interview process isn’t perfect and want the comfort of not overpaying a new employee.

Developers are worried about:

  • A loss of negotiating power where the originally discussed expectations are disregarded
  • Being lowballed on the subsequent salary offer
  • Perpetuating existing disadvantages and discrimination

The unfortunate reality is that some companies do ask for payslips to limit the “upside” for candidates on salary negotiation, so developers’ concerns are valid.

How we advise companies

Importantly: If your interviewing process does its job, it should help you have great clarity about whether a candidate can fulfil the role you have specced and benchmarked for. If you can’t change your payslip policy, be upfront with your candidates, so that everyone knows what they’re getting into at the beginning of the interviewing process.

What are the risks for companies asking for payslips?

  • Companies can lose out on top talent who reject the practice as discriminatory
  • It introduces a high friction point in your hiring process
  • It signals a lack of trust early on in your relationship with potential new employees
  • It can cause serious reputational harm that is hard to come back from – developers rely a lot on word of mouth when assessing potential job opportunities.

What are alternatives?

  • Verifying employment: Instead of a payslip, you could ask for an employment letter.
  • Benchmarking: There are many resources for benchmarking online. For example, OfferZen publishes annual data reports with the latest community insights on salaries and benefits by seniority, industry, skillset and location.
  • Increase calculation:
    • Fundamentally, compensation considerations should be based on skill, seniority and market-related compensation benchmarks and internally agreed upon before you start your hiring process.
    • Being clear about the salary range on offer and the job seeker’s salary expectations right from the start of the interviewing process helps not to waste time on either side in case you’re not aligned.

By adjusting the approach to these kinds of alternatives, companies can avoid losing the trust of solid candidates who feel apprehensive about this practice.

How can you respond to being asked for a payslip?

When coming face to face with a request for a payslip, you’ll need to decide how much of a principled stance you’re willing to make on the subject, in case the company isn’t willing or able to change their approach.

If you decide to push back, remember to be professional and treat the person with respect. In most cases, the HR person you’re dealing with is merely following standard company practices. Many otherwise excellent companies still ask for payslips, so don’t get too caught up here.

So what can you do?

Ask about a company’s payslip policy early on

If you have very strong feelings about the practice, ask every company you’re interviewing with at the beginning of the process if they will require your payslip to extend offers. That way you can bow out early and avoid wasting your time in a potentially lengthy hiring process.

Communicate your situation

If your main hesitation for not wanting to share is that you feel like you’re currently being underpaid, don’t be shy to bring this up. Prepare a solid rationale for why you may be earning under your potential and do extensive market research to back up your claim. This will put you in a much stronger negotiating position.

You can back up your claim about being underpaid with benchmarking data like the insights we’re publishing annually in our Dev Nation report.

Negotiate for pay transparency

You could tell a company you’re willing to share your payslip information if they’re transparent with you about the pay range of the role. Most hiring plans have budgeted salary ranges so this information is usually readily available (though not always shared).

Negotiate the increase policy instead

Some companies have a policy where they only increase your salary by up to some percentage. This increase policy is usually easier to negotiate against than the payslip policy itself - especially if you aced the interview process.

Share your payslip

In certain industries, such as banking, leveraging payslip information in the hiring process is deeply ingrained. Negotiating with them will be like pushing a boulder. If you want to work with them, there’s usually no alternative to sending your payslip.

Read more

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