OTE Compensation

OTE compensation, or on-target earnings, is the total pay an employee is expected to earn when they achieve their performance targets, usually combining base pay with variable compensation.

OTE is common in sales and other incentive-based roles. For example, a role may have a base salary plus commission that brings total expected earnings to the stated OTE when goals are met. OTE is a target, not a guaranteed amount, so compensation plans should clearly explain quotas, commission rules, timing, and what happens when performance is above or below target.