GTM & Hiring

OTE: On-Target Earnings

The total earnings a sales role pays at 100% quota attainment, base plus variable.

Definition

On-Target Earnings (OTE) is the total compensation a sales role pays at 100% quota attainment: base salary plus the on-target value of variable compensation. OTE is the standard way to advertise and benchmark sales roles.

Formula

OTE = Base Salary + Variable Compensation at 100% Attainment

OTE = Base + Variable @ 100% Quota

Worked example

An AE role with £60k base and £60k variable at 100% attainment has £120k OTE — a 50:50 split. A more senior strategic AE role might be £80k base + £80k variable for £160k OTE. Senior leaders sit closer to 70:30 base:variable.

Why it matters

OTE benchmarking determines whether you can hire the talent you need. Underpay OTE and you will not get the senior, retained, passive talent that drives revenue function performance. Overpay and your unit economics break. OTE design also signals what the role is for: the higher the variable, the more transactional the role.

Common mistakes

  • Setting OTE without benchmarking against the local market (Manchester, Leeds and London differ materially)
  • Designing a 50:50 split for a role that is really 70% account management
  • Capping OTE on the upside (kills retention of top performers)

Related terms

Quota AttainmentWin Rate

Read more in The Guide

Chapter: Building Revenue Teams →

Sources & further reading

  • — Drawn from Evara's working definitions used on retained search and revenue advisory engagements (2024–2026).
  • — Reconciled against industry conventions in SaaStr, OpenView SaaS Benchmarks and Bessemer State of the Cloud.
  • — Reviewed by Rich Evans, Strategic Advisor at Evara and former operator/founder.

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