Also called: OTE
On-target earnings (OTE) is the total compensation a sales role is expected to earn, base salary plus variable pay, if the person hits 100% of their assigned quota.
On-target earnings gets quoted in job postings as a single number, but it's really two numbers added together: a fixed base salary and a variable component, commission or bonus, that's only guaranteed at 100% of quota attainment. Someone hitting 60% of quota doesn't automatically take home 60% of OTE. The actual payout depends on the specific comp plan's accelerators and decelerators layered on top of the base formula.
Two roles can post an identical OTE figure with very different risk built in. A plan weighted 70% base and 30% variable is far less volatile month to month than a 50/50 split with the same total OTE, since more of the income is guaranteed regardless of performance. A candidate comparing two offers on the OTE number alone, without checking the split, is comparing two different jobs that happen to share one label. Quota size shapes the picture too: the same OTE against a much larger quota is a tougher target to hit, and the number on an offer letter says nothing about how realistic that quota actually is.
OTE only means something alongside the base and variable split and the quota it's tied to. The same OTE figure with a lower quota and richer accelerators is a very different offer than a higher quota paired with a flat, uncapped commission curve.
OTE gets treated as a guaranteed number instead of a target. It's what a rep earns at full quota attainment, not an average or a floor, and a role with a high OTE and an unrealistic quota can pay out well below that figure in practice.
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