If I had a dime for every time I got asked about working with recruiters and whether or not to tell them how much they got paid, I'd be rich.  EVERYONE worries about this.  And with good reason.  Lots of recruiters use this as a tool - and maybe the only measuring tool - to see if you get past the first gate.  If a recruiter needs to know how much you make in order to see if you are a good applicant, then they aren't a good recruiter.

It doesn't matter how much you make.

Should I say it again?  IT DOESN'T MATTER HOW MUCH YOU MAKE.

Why?  Because a company has a predetermined range for what the job is worth.  The company KNOWS what it wants to pay and how much flexibility is in that range. They want to pay for the qualifications - the skills and experience.  They are paying for what you bring to the table.  They are paying for whether you can do well and excel at the role.

Don't let the recruiter put you at the low end of that range or eliminate you as a potential candidate just because of what you make.

Rather than asking you what you  make, a good recruiter will ask you what YOU WANT TO MAKE.  The question should be "How much are you looking for?".  That is the gauge a recruiter should be using.  If your desired pay falls somewhere in the range of what the company is willing to pay, then the conversation can get started.

If a recruiter asks what you are making, answer with what you want to make.  Frame it in terms of the total package so you give yourself room to negotiate.  You can say things like "I am looking for a total package between $100k and $125k."

You may learn that the company doesn't want to pay that much.  Then you have learned that it isn't a good fit and it is time to move on.  Or you may be willing to make a concession.  But by answering the question up front - and letting the recruiter know how much you make - you are letting the recruiter do the decision-making for you.  They will decide, based on that information alone, whether you are a good candidate.

Times are changing.  States are implementing laws making it illegal to ask how much you make.  They don't want recruiters - or companies - to artificially deflate compensation levels or cause pay inequity between men and women.  Recruiters don't need to ask this question to do their job.  And you don't need to answer it.