OTE stands for on-target earnings. It's the number you see in a sales job offer: what the rep takes home in a year if they hit their target exactly. It's not a guarantee and not a cap. It's the expected pay at 100% of quota.
How OTE is built
OTE = base salary + variable pay at target
The split between the two is called the pay mix. A rep with a $60,000 base and $40,000 in target commission has a $100,000 OTE and a 60/40 pay mix.
The more a role depends on the rep's own closing, the more of the OTE is usually variable. Roles with long sales cycles or a lot of account management tend to have a bigger base.
Example
| Amount | |
|---|---|
| Base salary | $60,000 |
| Variable pay at 100% of quota | $40,000 |
| OTE | $100,000 |
If the annual quota is $800,000 in sales, the target commission rate is $40,000 / $800,000 = 5%.
- At 80% of quota, variable pay is lower, so total pay is below OTE.
- At 120% of quota, total pay goes above OTE. If the plan has an accelerator, it goes up faster.
Mistakes to watch for
- An OTE that can't be reached. If most reps miss quota year after year, the OTE in the offer isn't honest, and good reps leave.
- Hiding the math. Reps should be able to see how their monthly results translate to progress toward OTE. Otherwise the number is just a promise.
- Forgetting the base in the conversation. OTE is total pay. When you compare offers or adjust plans, compare the full package, not just the commission rate.
FAQ
Is OTE guaranteed?
No. Only the base salary is guaranteed. The variable part depends on results, so actual earnings can be below or above OTE.
What is a typical pay mix?
It depends on the role. Many B2B sales roles use something like 50/50 or 60/40 (base/variable), while account management roles often lean more toward base. Pick the mix that fits how much the rep's own effort drives the result.
How do I track progress toward OTE in Pipedrive?
Pipedrive shows deals and goals, but not commission or earnings. A tool like Delta Drive adds each rep's base salary, target and target bonus, and shows reps their earnings and progress during the month.