What Is OTE (On-Target Earnings)?
On-target earnings (OTE) is a sales rep's total expected compensation if they hit 100% of quota — combining base salary and target commission or bonus. Usually expressed as a base/variable split (e.g. 50/50), OTE sets pay expectations and ties earnings to performance.
Key takeaways
- OTE = base salary + on-target variable (commission/bonus) at 100% quota.
- Often expressed as a base/variable split, like 50/50 or 60/40.
- Actual earnings rise or fall with attainment against quota.
How OTE is structured
OTE assumes quota is met exactly. Beat quota and variable pay (often with accelerators) pushes earnings above OTE; miss it and earnings fall below. The base is guaranteed; the variable is at-risk and performance-driven.
Base/variable splits
Closing roles (AEs) often run a 50/50 split — half base, half variable. More pipeline-generation or technical roles lean toward a higher base (e.g. 70/30), reflecting how much of the outcome the rep directly controls.
Frequently asked questions
What does OTE mean?
On-target earnings — a rep's total expected pay (base plus variable) if they achieve 100% of quota.
How is OTE structured?
As a base salary plus on-target variable pay, usually shown as a split like 50/50 or 60/40 between guaranteed and performance-based earnings.
Is OTE guaranteed?
No — only the base is guaranteed. The variable portion depends on hitting quota, so actual earnings can be above or below OTE.
Related service: Model comp and quota in HubSpot