Calculate on-target earnings from base salary and target commission, or break down OTE by quota, commission rate, and pay mix for sales compensation.
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OTE Formula
When you only know quota and a commission rate, the target variable commission is derived first:
- 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. The calculator’s attainment scenario uses a flat rate with no thresholds, accelerators or caps; actual pay follows your compensation plan. OTE does not include benefits, equity, SPIFFs, or one-time bonuses.
Illustrative Pay Mix and OTE Examples
Pay mix is the split between base salary and target variable commission. The following figures are illustrative examples, not sourced current salary benchmarks or compensation recommendations; actual terms depend on role, market and employer.
| Role | Example Pay Mix (Base/Variable) | Illustrative 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 quota divided by total OTE. It differs from quota divided by variable commission. The following bands are illustrative heuristics, not evidence that a specific plan is healthy or achievable.
| 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? Choose a Breakdown option. Enter OTE and the known base salary, target commission, or pay-mix share to get the rest.
