Key takeaways
- OTE is base salary plus the variable pay earned at full quota.
- Only the base is fixed; the variable part depends on results.
- Sellers can earn above OTE when the plan pays accelerators past quota.
- Ask how many people in the team reach quota before trusting an OTE figure.
How OTE salary is worked out
An OTE salary is worked out by adding the base salary to the variable pay the plan promises at full quota. Both parts are yearly amounts, so the OTE already includes the commission or bonus a seller would earn in a year of exactly full quota, and nothing above it.
The variable part is usually commission on closed revenue for account executives and a bonus on meetings or pipeline for sales development representatives. It is paid monthly or quarterly, often after the customer pays, depending on the plan.
Base vs variable pay
Base pay is the fixed salary paid whatever the results, while variable pay rises and falls with performance. The split between them is called the pay mix, written as base first, so a sixty-forty mix means base makes up three fifths of OTE.
Roles where the seller controls the outcome more directly tend to carry more variable pay. Roles that depend on others, or that spend more time on existing customers, tend to carry more base. A heavily variable role can pay very well in a strong year and poorly in a weak one.
OTE vs base salary in a job advert
In a job advert, OTE is the headline number and the base salary is the part you can count on. Adverts that quote only OTE are common, so ask for the base before you compare offers.
A high OTE with a quota that few people reach is worth less than a lower OTE most of the team achieves. The questions below tell you which one you are looking at.
- What is the base salary and what is the variable pay at quota?
- How many sellers in the team reached quota last year?
- Is the variable pay capped, and are there accelerators above quota?
- Is there a reduced quota or a guaranteed draw while you ramp?
- When is commission paid, and can it be clawed back if a customer leaves?
What OTE means for a sales leader hiring
For a sales leader, OTE is a promise about what a good year looks like, so it has to match a quota the market can support. If most of the team misses, the advertised OTE stops being credible and good sellers leave for offers they believe.
Keep the OTE, the pay mix and the quota in one written plan, review them together each year, and explain to candidates how the numbers were set rather than leaving them to guess.
Where Pebbles Ai fits
Common questions
Is OTE guaranteed?
No. Only the base salary is guaranteed; the variable part depends on reaching quota, unless the plan includes a guaranteed draw for a set period.
Can you earn more than your OTE?
Yes, when the plan is uncapped. Many plans pay a higher commission rate, called an accelerator, on results above quota.
Is OTE quoted before or after tax?
Before tax. OTE is a gross figure, like a base salary, and both parts are taxed as normal income.
About this page. Written by the Pebbles Ai team for people who run sales, marketing and growth. Last updated .
