OTE explained for hiring managers

OTE, decoded

On Target Earnings is a forecast, not a salary. It describes what someone earns if they hit exactly 100% of quota, which means the number is only as honest as the quota behind it and the payment rules attached to it.

Ask for the attainment distribution, not the average

An average attainment figure hides the shape of the team. One person at 180% and four at 45% averages out to something respectable and tells a candidate nothing useful. The number that matters is how many people reached 100%, and whether the ones who did had anything the new hire will not have.

The same question works in reverse when you are the one hiring: if you cannot answer it about your own team, your advertised OTE is a hope rather than a forecast.

Publish the base as well as the OTE

• Candidates with financial commitments filter on base, whatever the OTE says.
• An OTE with no base reads as an attempt to hide the base.
• Publishing the split removes a whole category of late-stage dropout.
• It also forces an internal decision that otherwise surfaces at offer stage.

The arithmetic, worked through

OTE is addition, and stating it as addition removes most of the ambiguity in a pay conversation: base salary, plus the variable earned at 100% of quota, equals OTE. That is the whole calculation.

What the single figure hides is everything that decides whether the variable half arrives. Two roles advertised at the same OTE are different jobs if one splits 70/30 and the other 50/50 — the second carries far less guaranteed income and far more exposure to a quota somebody else set. Neither split is wrong; they suit different people, and which one you are offering is information the candidate needs before the final stage rather than at it.

You will notice this page runs the arithmetic without printing a single salary figure. That is deliberate, and it is not squeamishness. Put your own numbers into the compensation planner and it will do the addition, show what the package pays at different attainment levels, and keep the figures in your browser. What neither the tool nor this page will do is tell you what the number ought to be, because we hold no attributable dataset of what roles pay and a range without a source is guesswork in a confident font.

• Model a package with the compensation planner

The plan rules that decide what is actually earned

The split determines the risk. The plan rules determine the reality, and they are where an offer that looked generous quietly becomes an offer that is not. Ask about each of these explicitly, and write the answers into the offer rather than leaving them to the plan document nobody reads until month four.

• When commission is paid: on signature, on invoice, or on cash collected. The gap between the first and the last can be a full quarter of a seller's income.
• What happens on churn or non-payment. A clawback window is legitimate; an open-ended one transfers the company's credit risk onto the individual.
• Whether quota is set annually or reset quarterly, and who can change it mid-year, and on what notice.
• Accelerators and decelerators: what happens above 100%, and whether there is a cliff below which nothing is paid at all.
• What the seller is paid for renewals and expansion, if they own them. Unstated, this becomes the first argument of the second year.
• Whether ramp is a guarantee or a reduced quota, and what happens at the end of it.

Why we publish no OTE levels, and what we do instead

The most common request we get on this subject is for a number: what should we pay an AE, what is the going rate. We will not publish one here. Level varies by sector, deal size, territory, funding stage and how much of the number the seller is actually responsible for creating, and a single range that ignores all of that is wrong in a way that still sounds authoritative.

What we can do is two things. In a conversation, we will tell you what we are seeing in the searches we are actually running, and be explicit about where that evidence is thin. And on this site, we give you the structure and the arithmetic so you can build a defensible package from your own quota, your own margin and your own attainment history — which is a better input than somebody else's median anyway.

• How sales compensation is structured
• Talk to us about a package

Common questions

Is uncapped OTE a selling point?

Only alongside evidence that people reach target. Uncapped upside above an unreachable quota is worth nothing, and experienced candidates read it that way.

Should OTE include a ramp guarantee?

State them separately. A guarantee is a real part of first-year earnings, but blending it into OTE overstates the steady-state figure.

Why don't you publish salary ranges on this page?

Because a range without a source and a date is guesswork with a confident font. Our role-specific pay pages stay unpublished until each figure can be attributed.

What is a normal base-to-variable split?

There is no single normal, and we will not invent one. The durable principle is that the split should track how much of the outcome the individual actually controls: a closing role with a personal quota carries more variable than a role whose results depend mostly on the rest of the business. Decide it from your own motion rather than from a figure on a website.

Should we advertise OTE or base?

Both. An OTE with no base reads as an attempt to hide the base, and candidates with mortgages filter on base whatever the headline says. Publishing the split costs you the applicants who were never going to accept, which is the point.

Can we work out a package before we know what the market pays?

Yes, and it is usually the better order. Start from what the role has to deliver, what margin it generates and what you can sustain if attainment is average rather than excellent. That produces a package you can defend in a negotiation, which an imported median never does.