On-Target Earnings

## On-Target Earnings (OTE)

OTE represents what an employee will earn if they hit their performance targets exactly. It is the standard measure for comparing sales and commission-based roles.

### How It's Calculated

```
OTE = Base Salary + Target Variable (at 100% achievement)
```

### Example

A sales representative with a $80,000 base and $80,000 target commission (50/50 split) has an OTE of $160,000. Exceeding quota could yield $200,000+ with accelerators.

### Important Nuances

- OTE is a **target**, not a guarantee. Actual pay depends on performance.
- Top performers often earn 120–200% of OTE through accelerators.
- Underperformers may earn only the base salary.
- OTE should not include signing bonuses, equity, or benefits.

### Pay Mix

The ratio of base to variable is called the pay mix. Common splits:
- 50/50: Aggressive sales roles.
- 60/40: Standard enterprise sales.
- 70/30: Customer success or solution consulting.
- 80/20: Non-sales roles with a bonus component.