OTE Calculator
Calculate On-Target Earnings
Frequently Asked Questions
What is OTE in sales compensation?
OTE (On-Target Earnings) is the total expected annual compensation when a salesperson meets 100% of their quota. It includes base salary plus target commission. For example, $60,000 base + $40,000 target commission = $100,000 OTE.
How is the OTE split typically structured?
Common splits are 50/50, 60/40, or 70/30 (base/variable). Higher base ratios suit complex, long-cycle sales. Higher variable ratios suit transactional sales. A $100K OTE at 60/40 means $60K base + $40K target variable.
What happens if I exceed my sales quota?
Most plans include accelerators for over-quota performance. Common structures: 1.5x rate for 100-150% of quota, 2x rate above 150%. On a $40K target commission, hitting 150% could earn $60K-$80K in variable pay.
Is OTE guaranteed compensation?
No. OTE is the target, not a guarantee. The base salary portion is guaranteed, but the variable portion depends on performance. If you achieve 80% of quota, you typically earn 80% of the variable component.
How do I evaluate an OTE offer?
Consider the base-to-variable ratio, quota attainability (ask what percentage of reps hit quota), accelerator structure, payment frequency, and clawback provisions. A realistic OTE where 60-70% of reps achieve target is a healthy plan.