OTE Calculator

Calculate on-target earnings and achievement percentage. Model sales compensation scenarios.

Base Salary (AUD)Fixed annual salary

Target Commission (AUD)At 100% quota

Quota Attainment (%)Actual performance

Accelerator Rate (%)Commission rate above quota

On-Target Earnings (OTE)

$120,000.00

At 100% quota attainment

Actual Earnings

$120,000.00

At 100% quota

Base vs Variable Split

67/33

Base / Variable

OTE Achievement

0.0%

vs OTE target

OTE Insights

• Typical B2B split: 60/40 or 70/30 (base/variable)

• Enterprise sales: 50/50 split common

• SMB/transactional: 70/30 or 80/20

• Accelerators: 1.5-2x base rate above quota

• Only 50-60% of reps hit 100% quota

How to Calculate OTE (On-Target Earnings)

OTE represents total compensation a sales rep earns when hitting 100% of quota. It combines fixed base salary with variable commission, providing a complete picture of earning potential.

The OTE Formula

OTE = Base Salary + Target Commission

Actual Earnings = Base Salary + (Target Commission × Quota Attainment %)

With accelerators for performance above quota

Understanding OTE Components

Base Salary: Fixed annual compensation, paid regardless of performance
Target Commission: Variable pay earned at 100% quota attainment
OTE: Total compensation at quota (base + target commission)
Accelerators: Higher commission rates above 100% quota

Base vs Variable Split Benchmarks

Enterprise B2B (50/50): $100K base + $100K commission = $200K OTE
Mid-Market B2B (60/40): $90K base + $60K commission = $150K OTE
SMB B2B (70/30): $70K base + $30K commission = $100K OTE
Inside Sales (70/30 or 80/20): $60K base + $20-25K commission = $80-85K OTE

How to Design Effective OTE Plans

Competitive Benchmarking: Research market rates for role, experience, and geography
Right Base/Variable Split: Match to sales cycle (longer cycle = higher base)
Realistic Quota: 50-60% of reps should hit 100% quota
Include Accelerators: Reward over-performance (1.5-2x base rate)
Clear Attainment Thresholds: Define what happens at 50%, 75%, 100%, 125% of quota
Transparency: Reps should easily calculate their earnings

OTE Reality Check

Important considerations when evaluating OTE:

Only 50-60% of reps hit 100% quota: OTE is a target, not guaranteed
Ramp Time: New reps may take 3-6 months to reach full productivity
Plan Changes: Comp plans often change annually
Quota Inflation: Quotas typically increase 10-20% year-over-year
Clawbacks: Some plans include clawbacks for cancellations/returns

Evaluating OTE Job Offers

When comparing sales job offers, consider:

What % of reps hit quota? (Ask for attainment data)
What's the average rep tenure? (High turnover = red flag)
How is quota set? (Revenue, pipeline, activities?)
What's included in accelerators?
Are there caps on commission?
What's the ramp period and comp during ramp?

Frequently Asked Questions

What is OTE in sales?

OTE (On-Target Earnings) = Base Salary + Target Commission at 100% quota attainment. It's total expected compensation if a rep hits their quota. Example: $80K base + $40K commission = $120K OTE. OTE assumes quota achievement - actual earnings vary based on performance. Used to benchmark sales comp across companies and compare job offers.

What is a typical base vs variable split?

Typical splits: B2B SaaS: 60/40 or 70/30 (base/variable). Enterprise sales: 50/50 (higher variable for longer cycles). SMB/transactional: 70/30 or 80/20 (more predictable income). Inside sales: 70/30. Field sales: 60/40 or 50/50. Higher variable = more performance-driven, riskier for rep. Lower variable = more stable, less upside.

How do accelerators work in OTE plans?

Accelerators are higher commission rates above quota (typically 1.5-2x base rate). Example: 10% commission up to quota, 15% above quota. If quota is $500K and you close $600K, you earn: $500K × 10% = $50K (base) + $100K × 15% = $15K (accelerated) = $65K total. Accelerators incentivize over-performance and reward top performers. Some plans have multiple tiers (90%, 100%, 110% of quota).