Calculate on-target earnings from base salary and target commission, or break down OTE by quota, commission rate, and pay mix for sales compensation.
Related Calculators
- Compa Ratio Calculator
- Annual Sales Calculator
- Ticket Sales Calculator
- Total Flat Rate Calculator
- All Business Calculators
OTE Formula
OTE = Base Salary + Target Variable Commission
When you only know quota and a commission rate, the target variable commission is derived first:
Target Variable Commission = Annual Quota × Commission Rate OTE = Base Salary + (Annual Quota × Commission Rate)
- OTE — on-target earnings, the total annual pay you should expect at 100% quota attainment.
- Base Salary — fixed annual pay, paid regardless of performance.
- Target Variable Commission — commission paid when you hit 100% of quota.
- Annual Quota — the revenue or bookings target assigned for the year.
- Commission Rate — percent of quota paid as commission at 100% attainment.
OTE assumes 100% quota attainment. Actual pay scales up or down with performance, accelerators, and any caps in your comp plan. OTE does not include benefits, equity, SPIFFs, or one-time bonuses.
Typical Pay Mix and OTE Ranges
Pay mix is the split between base salary and target variable commission. Roles closer to closing the deal carry more variable.
| Role | Typical Pay Mix (Base/Variable) | Typical OTE (US) |
|---|---|---|
| SDR / BDR | 70/30 | $60k–$90k |
| Account Executive (SMB) | 50/50 | $100k–$160k |
| Account Executive (Mid-Market) | 50/50 | $160k–$240k |
| Account Executive (Enterprise) | 50/50 | $240k–$400k+ |
| Customer Success Manager | 75/25 or 80/20 | $90k–$160k |
| Sales Manager | 60/40 | $180k–$300k |
| VP of Sales | 50/50 or 60/40 | $300k–$500k+ |
Quota-to-OTE ratio is another quick check. Most healthy plans put quota at 4x to 6x the variable commission, or roughly 3x to 5x total OTE.
| Quota / OTE Ratio | Read |
|---|---|
| Less than 3x | Quota likely too low; comp plan may be hard to fund. |
| 3x to 5x | Standard range for SaaS and B2B. |
| 5x to 8x | Aggressive; check accelerators and historical attainment. |
| More than 8x | Quota likely unrealistic for the role. |
Example and FAQ
Example. An AE has a $90,000 base salary, a $750,000 annual quota, and an 8% commission rate at 100% attainment.
- Target variable commission = $750,000 × 0.08 = $60,000
- OTE = $90,000 + $60,000 = $150,000
- Pay mix = 60% base / 40% variable
Is OTE guaranteed? No. Only the base salary is guaranteed. Variable pay depends on attainment.
Does OTE include benefits or equity? No. OTE is cash compensation only: base plus target commission or bonus.
What happens if you exceed quota? Most plans pay accelerators above 100%, so actual earnings can exceed OTE. Some plans cap commissions; check yours.
How do you back into base from OTE? Use the Breakdown tab. Enter OTE and either the variable commission, base salary, or pay mix percentage to get the rest.
