How OTE is built
On-target earnings combine two parts. The base salary is paid regardless of results. The variable part, usually commission or a bonus, is what the plan pays if the rep achieves exactly their quota. Add them together and you have the OTE. The split between the two is called the pay mix, often written as two numbers for base and variable, such as 50/50 or 60/40. Most plans pay more than the variable target when a rep beats quota, sometimes at a higher rate, and less when they miss.
How to calculate it
OTE = base salary + variable pay at 100% of quota
Worked example: A role offers a $60,000 base salary and $40,000 in commission at 100% of quota. OTE is $60,000 + $40,000 = $100,000, a 60/40 pay mix.
Example figures only. Use your own numbers.
Practice negotiating a sales job offerExample
Two offers both list an OTE of $90,000. The first has a $60,000 base and a quota most of the team hits; the second has a $45,000 base and a new quota nobody has tested yet. The candidate asks both hiring managers about team attainment and ramp before deciding.
Why it matters
OTE is the headline number in most sales job ads, but it's a target, not a guarantee. What you actually earn depends on whether the quota is achievable, how the commission plan pays below and above target, and how long new hires get to ramp. Two jobs with the same OTE can be very different: one with a high base and a realistic quota, the other with a low base and a quota most reps miss. That's why experienced candidates ask about attainment across the team, not just the OTE.
Questions to ask in an interview
When OTE comes up, ask what share of the team hit quota last year, how quotas are set, whether new hires get a ramped quota, whether commission is capped and when it's paid. Ask these calmly and specifically; they show commercial judgment, not doubt. Practice asking them out loud, along with your answer to 'What are your salary expectations?', so neither catches you off guard.