On-Target Earnings (OTE)

OTE (also known as On-Target Earnings) refers to the amount of compensation a payee can expect to receive if all quotas are achieved and other conditions are met (i.e., if everything is “on target”).

This is only an estimate and is often used for expectation setting and budgeting. While the sales rep could earn this amount, they could also earn less, or exceed their targets and earn more. Broadly speaking, OTE = Target Variable Compensation + Base Salary