On-Target Earnings is the total cash a sales rep is contractually paid when they hit exactly 100% of quota. It is base salary plus variable commission, almost always quoted as an annual number, almost always quoted before equity, SPIFFs, and accelerators. OTE is the headline figure on every sales job post and the most over-stated number on every sales resume.

The structure is simple. A 60/40 split means 60% of OTE is base, 40% is variable. The mix slides predictably as deal size grows: SDRs run 70/30, mid-market AEs land near 50/50, enterprise AEs creep toward 50/50 or even 40/60 once the deals get large enough that one closed logo pays the year.

Formula

OTE = base_salary + (commission_rate * quota)

Quota is the annual revenue target. Commission rate is the percent of every closed dollar paid to the rep up to 100% of quota. Above 100% the rate usually accelerates, but accelerator earnings are not part of OTE.

Worked example

A SaaS mid-market AE has a $130K base, 50/50 split, and a $1.3M annual quota. Variable target is $130K. Commission rate is 130,000 / 1,300,000 = 10%. Stated OTE is $260K. If she lands at the segment median of roughly 65% attainment, actual cash comp is 130,000 + (130,000 * 0.65) = $214,500 — about 18% below the OTE on the offer letter, with no clawback or PIP in sight.

When it's used

OTE is the number recruiters lead with, the number candidates negotiate against, and the number Bridge Group's 2024 SaaS AE Metrics report tracks for benchmarking. Median enterprise AE OTE in 2024 sat around $290K, mid-market near $215K, SMB around $145K — all assuming you hit. The job posting says $290K. The W-2 says $190K.

Common misconceptions

OTE on a resume is not earned compensation. A candidate at 60% attainment for three years has been paid roughly 76% of OTE — yet "OTE: $250K" stays on the LinkedIn headline. Three things to verify on any OTE claim. Mix: what is base versus variable. Quota: without quota, OTE is unverifiable. Attainment history: what the rep actually took home.

This is why WinsAbove pulls verified W-2-equivalent comp from CRM data and benchmarks against the Alpha Score cohort instead of trusting self-reported OTE. Recruiters use the same data on the recruiter platform to filter out the OTE-inflation problem before a single screen is wasted.

What OTE leaves out

OTE does not include equity, signing bonus, accelerators, SPIFFs, or president's club trips. It also does not include the commission clawback you owe back when a customer churns inside the clawback window — typically 6 to 12 months. A 142% attainment year that triggers a 30% logo churn the next year can net out below OTE once the clawback hits.

Related WinsAbove concepts

For why the denominator behind OTE is unreliable, see quota attainment. For a market-comparable comp signal that does not depend on a hiring manager's promise, see Alpha Score. For the question OTE is silently asking — "is this rep worth more than the next available one?" — see replacement-level rep.

OTE (On-Target Earnings)