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OTE in Sales 

OTE is the amount of money a salesperson expects to earn in a given time. The idea behind OTE is that salespeople should be incentivized to sell as much as possible because they'll earn more money if they do so. This method is often referred to as "pay for performance," because it rewards salespeople for doing what they're supposed to do: selling products or services.

OTE is not the same as an employee's actual earnings, as it does not take into account any deductions for taxes or benefits. However, it can be a useful way for employers to communicate the earning potential of a sales position to potential employees.

What is ote in sales?

"OTE" stands for "On Target Earnings" and refers to the amount of money that a salesperson is expected to earn in a given period of time. It is typically used as a measure of performance and can be based on a variety of factors, such as the salesperson's base salary, the commissions they earn on their sales, and any bonuses or incentives that may be available. 

OTE is often used as a way to motivate salespeople and encourage them to meet or exceed their sales targets. It is also sometimes used as a benchmark for determining the value of a sales role or for setting sales goals for individual salespeople or for a team.

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What's the difference between ote and a bonus?

OTE, or On Target Earnings, is a term used to describe the total amount of money that an employee is expected to earn in a given year, including both their base salary and any additional bonuses or commissions that they may be eligible to receive. OTE is often used as a way to communicate to potential employees what their potential earnings could be in a particular role, and it is typically used as a measure of performance for sales positions or other roles in which an employee's compensation is largely based on their ability to meet or exceed certain targets.

A bonus, on the other hand, is an additional payment that is given to an employee in recognition of their outstanding performance or for achieving certain goals. Bonuses can be given in various forms, such as cash, company stock, or other types of rewards, and they are typically paid on top of an employee's regular salary or wages. Bonuses are often used as a way to incentivize employees to work harder and achieve more, and they can be based on a variety of factors, such as individual performance, team performance, or overall company performance.

What does ote include? 

The components of OTE can vary depending on the specific sales role and the company's compensation structure. However, some common elements that may be included in OTE are:

  1. Base salary: This is the fixed amount of money that a salesperson receives as part of their employment, regardless of their sales performance.
  2. Commission: This is a percentage of the sales that a salesperson makes, which is typically based on the value of the sale.
  3. Bonuses: Some companies offer bonuses or other incentives to salespeople who exceed certain sales targets or achieve other notable milestones.
  4. Benefits: In some cases, OTE may also include benefits such as health insurance, retirement contributions, and other perks that are provided to the salesperson as part of their employment.

What are the benefits of ote in sales?

OTE is often used as a way to motivate salespeople and to provide them with a clear understanding of what they need to do in order to earn a certain amount of money.

There are several benefits to using on-target earnings (OTE) in sales compensation:

  1. Motivation: OTE can be a powerful motivator for salespeople, as it provides them with a clear target to aim for and the opportunity to earn more money through their performance.
  2. Alignment: OTE can help align the interests of salespeople with those of the company, as it provides an incentive for salespeople to focus on activities that contribute to the company's success.
  3. Flexibility: OTE can provide flexibility in terms of how much an employee can earn, as it allows for the possibility of earning more through performance rather than being limited to a fixed salary.
  4. Transparency: OTE can provide transparency in terms of how an employee's compensation is determined, as it clearly outlines the performance targets that must be met in order to earn the full amount of OTE.
  5. Performance measurement: OTE can help managers assess the performance of their sales team, as it provides a clear benchmark against which to measure the team's success.

How does OTE in sales works?

OTE, or On Target Earnings, is a type of compensation structure used in sales positions that combines a base salary with a commission component. It is designed to provide incentives for salespeople to exceed their sales goals and earn higher overall earnings.

Here's how OTE typically works:

  1. The employer sets a base salary for the salesperson, which is a fixed amount that is paid on a regular basis (e.g., weekly or monthly). This base salary is usually lower than the salary of a non-sales position with similar responsibilities.
  2. The employer also sets a sales target or quota for the salesperson to achieve. This target is usually based on the salesperson's job responsibilities, the market conditions, and the company's goals.
  3. If the salesperson meets or exceeds the sales target, they will earn a commission on top of their base salary. The commission is usually a percentage of the salesperson's total sales revenue.
  4. The total earnings of the salesperson, including both their base salary and any earned commissions, is referred to as their OTE.

How to calculate ote for sales?

To calculate the on-target earnings (OTE) for a sales position, you will need to know the following information:

  1. The base salary for the position: This is the minimum amount of money that an employee will receive in exchange for their work.
  2. The commission structure: This is the percentage of the sales that the employee will receive as a commission.
  3. The target sales goal: This is the amount of sales that the employee is expected to achieve in a given period of time (e.g. per month or per year).

To calculate the OTE, you can use the following formula:

OTE = base salary + (commission percentage x target sales goal)

For example, if the base salary is $50,000 per year, the commission percentage is 10%, and the target sales goal is $500,000 per year, the OTE would be:

OTE = $50,000 + (10% x $500,000) = $50,000 + $50,000 = $100,000

Employee pulse surveys:

These are short surveys that can be sent frequently to check what your employees think about an issue quickly. The survey comprises fewer questions (not more than 10) to get the information quickly. These can be administered at regular intervals (monthly/weekly/quarterly).

One-on-one meetings:

Having periodic, hour-long meetings for an informal chat with every team member is an excellent way to get a true sense of what’s happening with them. Since it is a safe and private conversation, it helps you get better details about an issue.


eNPS (employee Net Promoter score) is one of the simplest yet effective ways to assess your employee's opinion of your company. It includes one intriguing question that gauges loyalty. An example of eNPS questions include: How likely are you to recommend our company to others? Employees respond to the eNPS survey on a scale of 1-10, where 10 denotes they are ‘highly likely’ to recommend the company and 1 signifies they are ‘highly unlikely’ to recommend it.

Based on the responses, employees can be placed in three different categories:

  • Promoters
    Employees who have responded positively or agreed.
  • Detractors
    Employees who have reacted negatively or disagreed.
  • Passives
    Employees who have stayed neutral with their responses.

Does OTE include base salary?

Yes, that's correct. On Target Earnings (OTE) is the total expected earnings of a salesperson, including both their base salary and any earned commissions. 

Is OTE on top of salary?

No, on-target earnings is not on top of salary. On-target earnings is the total possible salary an employee can earn; that is, base salary plus possible commission.

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