Guide
What is OTE?
OTE means on-target earnings. It is the total annual earnings you would make if you hit the performance target built into the plan.
OTE = base salary + target variable pay
If a role has a 70k base salary and 70k target commission, the OTE is 140k.
1
Treating OTE as guaranteed income.
It is a target-state number, not a promise.
2
Comparing OTE without comparing risk.
Two equal OTE jobs can have very different base/variable splits and real outcomes.
FAQ
Can actual earnings exceed OTE?
Yes. In an uncapped or strongly accelerated plan, top performers can earn more than OTE.
Is a higher OTE always better?
No. A lower OTE with a stronger base and more realistic plan may be safer.
Questions to ask when someone quotes OTE
1
What percentage of the team hit target last year?
2
Is the plan capped, and how are over-target earnings treated?
3
What exactly counts toward target attainment?
Without those answers, OTE is useful as a headline number but weak as a real earnings forecast.