What is OTE? (On‑Target Earnings)

OTE (On‑Target Earnings) is what you earn when you hit your goals. In most sales and performance plans it’s:

• Base salary (fixed pay) + Target variable (commission or bonus at 100% performance)

Why OTE matters

• Comparing offers: two roles can have the same OTE but very different base/variable splits.
• Risk vs stability: higher variable pay usually means higher upside and more volatility.
• Plan clarity: if OTE is unclear, the plan is probably unclear too.

A simple example

Base salary: $60,000
Target commission (at goal): $40,000
OTE = $100,000

If you hit 80% of target, your variable might be ~80% of target (depending on accelerators/caps), so your total would be closer to $92,000.

Rule of thumb

• OTE = base + target variable (not “best case”).
• If a plan only shows “uncapped commission” without realistic examples, ask for a quota attainment table.