One of the best things about kids is their curiosity. They just naturally want to know things about the world. They want to learn new things about themselves, each other and their surroundings. While it can be enjoyable to observe their zeal for learning and questioning, that curiosity can sometimes cause problems. Kids may unknowingly break social taboos by asking questions about things most respectful adults just don't talk about. For example, your kids might ask you about your salary.
As with other topics you discuss with your kids, your answer should differ based on the age of the child. This isn't because younger kids can't be "trusted" with more honest answers. Rather, you should tailor your answer to what the child actually wants to know, which tends to change with age. In fact, asking a question back, like "Why do you ask?" can give you a good idea of what they're really after.
Very young children, under 5 years or so, are usually interested in a sense of security. They may have heard something on the news or from a classmate about economic hardship, such as families who can't put bread on their tables. You want to offer a child who asks this an idea of the kinds of things that you afford with your salary, like housing, electricity and food. You want to ensure that sense of security with honesty and transparency.
Older children, between 6 and 8, are concerned with questions of right and wrong. They might be asking because they don't think it's fair you aren't paid more (you might even agree!). This is a teachable moment to talk about what drew you to the career you chose and to explain that there are rewards for some kinds of work that go beyond money.
As kids get a little older, around 10 years old, it might be appropriate to include them in the budgeting process. Show them the process you use to make financial decisions and ask for their input in some aspects if you can. Children at this age are generally able to combine facts from multiple places and may be able to offer creative solutions to money problems.
As difficult as it may be, don't offer a vague or incomplete answer. You'll be walking away from a valuable opportunity to help your children understand the realities of the adult world. Besides, if they really want to know, they'll find out one way or another!