Finance

OTE: The Sales Salary That Might Be a Lie

"OTE £75,000!" the job ad screams.

Sounds great. But here's what they're not telling you: OTE is what you earn IF you hit your target. And depending on the company, that "if" might be a very big if. Before you get excited about that six-figure OTE, let's talk about what it actually means.

What OTE Stands For

OTE = On-Target Earnings. It's your base salary plus the commission you'd earn at 100% of your sales quota.
Base: £40,000
Target commission: £35,000
OTE: £75,000

Simple maths. But the devil's in the details. The key word is "target." OTE isn't what you'll earn — it's what you could earn if everything goes perfectly. It's the best-case scenario, not the average outcome.

The Question Nobody Asks

Here's what you should ask in every sales interview: "What percentage of the team hits OTE?"

If 70-80% of salespeople hit target, OTE is realistic. You can reasonably expect to earn it.

If 30% hit target, that £75,000 OTE is fantasy for most people. You're more likely to earn £50,000-£60,000. If they won't answer this question, or they get evasive, that tells you something.

Other versions of this question:

  • "What did the average rep earn last year?"
  • "What's the range of earnings across the team?"
  • "How many people exceeded target vs. missed it?"
  • "What happened to the person who had this territory before?"

The Base/Commission Split

The ratio between base salary and commission tells you a lot about the role.

70/30 or 80/20 (high base): More stability, less upside. Often account management or customer success. Good for risk-averse people.

50/50 (balanced): Standard for many sales roles. Decent stability with meaningful upside.

30/70 or 20/80 (low base): High risk, high reward. You'd better be confident in your abilities. Need savings to survive slow months.

100% commission: Maximum risk. Potentially huge earnings. Basically self-employed. Only for experienced salespeople with existing pipeline.

Accelerators: Where the Real Money Is

Many commission plans have accelerators — higher rates for exceeding target.

Example:

  • 0-100% of quota: 10% commission
  • 100-150% of quota: 15% commission
  • 150%+ of quota: 20% commission

This means top performers can earn significantly more than OTE. Someone hitting 150% of target might earn £100,000+ on a £75,000 OTE.

Decelerators: The Nasty Surprise

Some plans have decelerators — lower rates for underperformance.

Example:

  • Below 50% of quota: 5% commission
  • 50-100% of quota: 10% commission

This means if you're struggling, you earn even less than the proportional amount. Ask about this. It's not always disclosed upfront.

The Ramp Period

New salespeople don't hit the ground running. There's a learning curve — product knowledge, sales process, building pipeline. Good companies offer a ramp period:

  • Guaranteed commission for the first 3-6 months
  • Reduced quota while you're learning
  • Training and support

Bad companies throw you in the deep end and wonder why you're not hitting target in month two.

Clawbacks: When They Take It Back

Some commission plans include clawbacks — if a customer cancels or doesn't pay, you have to return the commission.

Reasonable clawback: Customer cancels within 30 days, you return the commission. Unreasonable clawback: Customer cancels after 18 months, you return commission from a deal you've forgotten about. Understand the clawback terms before you accept.

Calculating Realistic Earnings

Don't just look at OTE. Model scenarios.

At 70% of target: £40,000 base + (£35,000 × 0.7) = £64,500
At 100% of target: £40,000 + £35,000 = £75,000
At 130% of target (with accelerator): £40,000 + £35,000 + (£35,000 × 0.3 × 1.5) = £90,750

Now ask yourself: which scenario is most likely for you, in this role, at this company?

Red Flags

  • "Unlimited earning potential!" — Usually means low base, unrealistic targets.
  • Won't share quota attainment data — They know the numbers are bad.
  • High turnover — People leave when they can't earn.
  • Frequent plan changes — They're trying to avoid paying out.
  • Capped commission — Why would top performers stay?
  • Vague commission structure — If they can't explain it clearly, something's wrong.

Green Flags

  • Transparent about attainment rates — Confident in their targets.
  • Clear, documented commission plan — No surprises.
  • Reasonable ramp period — They invest in new hires.
  • Uncapped commission with accelerators — They reward success.
  • Low turnover in the sales team — People are earning and staying.
  • Existing salespeople willing to talk to you — Nothing to hide.

The Bottom Line

OTE is a target, not a guarantee. It's what you could earn, not what you will earn.

The best way to evaluate a sales role is to ignore the OTE entirely and focus on the base salary. Can you live on the base? If yes, the commission is upside. If no, you're gambling. Then look at the realistic earnings. What do average performers make? What do people in their first year make? What's the turnover rate? These numbers tell you more than any OTE figure.

Related Calculators

Model your potential earnings:

OTE,sales,commission,compensation