On-target Earnings

What is On-target Earnings?

On-target earnings, commonly abbreviated as OTE, represent the total annual compensation an employee can expect when they fully meet their sales quotas or performance targets. OTE combines base salary with variable pay such as commissions, providing a clear picture of potential income for roles with performance-based compensation.

Why On-target Earnings Matters

If workers fall short of their sales quota, they may not receive their full OTE amount. It is important to note that bonus plans and other forms of compensation, such as relocation perks or equity grants, are typically not included in the OTE figure. Employers use OTE to attract and benchmark talent in competitive sales and revenue-generating roles.